Carlos Lara on the Economic Crisis, Part 2 of 9: The Importance of Economic Education
(Read Part 1 of Carlos Lara on the Economic Crisis.)As we saw in part 1, personal economic education is the starting point for a solution to the economic crisis. We cannot rely on political and financial elites, for they have caused the problems, and the course they are charting for us will prolong the crisis.
Getting down to the nitty-gritty of economics, Mr. Lara said that economics deals with making a living and setting aside resources -- in short, with the process of economizing. He presented three assertions:
- We live in a world of scarcity, not abundance, which has been difficult for Americans to grasp; even though economics is subordinate to theology, economics deals with the earthly realities -- such as scarcity -- of what we have, not with spiritual ideas about where we came from
- Private property is foundational to freedom and markets; we are losing freedom as private property and private property rights are taken away
- Human nature has an evil side, as even Aristotle observed; men tend to hate the burdens of working and would rather steal; we are fallen and limited, as our Founders recognized when they set up a limited government to protect ourselves from ourselves
First of all, what is economics? The word derives from the Greek words oiko, meaning household, and nomos, meaning law or rule. Thus, an economist, in the original sense of the word, is someone who stewards the resources of a household. Although the precise word does not appear in these verses, the concept reminds us of Paul’s exhortations to wives in Titus 2:5 and I Timothy 5:14 to be keepers at home and to guide the house. It would appear that a good wife is a good economist, or steward of the household’s resources.We must battle the errors and crises of our day, plowing forward as stewards and dominion-bearers, by learning, embracing, and practicing sound economics. As Mr. Lara said, the solutions begin with us as individuals. I conclude with an exhortation I gave in my essay on economics:
A similar word, oikonomia, is translated in the New Testament as “stewardship” or “dispensation.” We understand from Christ’s parable of the talents in Matthew 25 that God has entrusted to us a dispensation of talents and resources; we are not ultimately owners of anything, but rather stewards who must use these talents and resources for His glory and the greatest profit for advancing His Kingdom in time and history.
My first college economics textbook defined the discipline of economics as the “science of scarcity.” Without scarcity, economics would not exist. So, what is scarcity? The textbook said it is the condition of unlimited human wants and limited available resources to satisfy those wants. In more familiar economic terms, Dr. Gary North says it is the state in which demand exceeds supply at zero price. Thus, economic reality leads to a need for some sort of rationing mechanism such as a money price. The foundation of economics is the reality that humans make choices and act by scarce means to satisfy the most pressing of their unlimited needs and wants.
I encourage everyone to pursue the study of economics as autodidacts, self-taught learners. Ludwig von Mises, the scholar I mentioned earlier, stated, “Economics deals with society's fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen.” In his important book, The Philosophy of the Christian Curriculum, R.J. Rushdoony says, “Economics deserves a place in the high school curriculum, not as a branch of civics or civil government, but as an independent law sphere.”(Read Part 1 of Carlos Lara on the Economic Crisis: Three Pillars of Modern Social, Economic, and Political Systems.)
posted by C.S. Hayden @ 6:00 AM
3 Comments:
you are a true fanatic
Anon: You think this is fanatical???
As we like to say in Tennessee, this ain't nuthin'! Just keep reading.
I'm curious if you are familiar with the National Organization of Raw Materials and the economic work of Carl Wilken?
The book, "Unforgiven, Selling America for Debt and War" by Charles Walters (IBSN: 0-911311-67-X)is a full treatise on this economic theory which holds that true wealth is provided by the created world in its raw commodities - agriculture, mining, oil/gas.
The economic profit that comes from these commodities require no payback to the created world and thus forms the basis for the profit of an entire economy. Wilken and colleagues through study of US Govt economic data discovered multipliers of income from raw commodites to other sectors of our economy which could calculate the total economic activity of the US economy. Interstingly he shows how higher commodity prices enables wages to rise even higher making food costs a comparably smaller budget category. He also develops the notion of a parity price which agriculture has to obtain compared to non-agricultrual wages and other factors for our national economy to acheive full employment. He demonstrates that when agriculture is paid its parity price (which can be established and continually updated mathematically from specific recordable economic activity) there is no need for national govt. debt. He corrrespondingly demonstrates that when raw commodity producers are not paid a parity price, how the larger economy will contract and our standard of living will fall as it did in the Great Depression or how the goverment will use debt to artificially prop up the economy which is ultimately a ponzi scheme.
This economic theory strongly supports private property and a "peoples captialism" which encourages domestic economic activity which does not need government debt and which does rely upon the Constitutional wisdom of tarrifs to guard against inequitable foreign trade. This theory is firmly opposed to Keynesian economics.
The surprising note is that Carl Wilken and colleagues were able to catch the ear of Congress in 1942 resulting in the passage of "Steagall Amendment" that gave agricultural commodities a parity price through two years following the end of WWII. This amendment built upon the Agricultural Adjustment Act of 1938 and the Stablization Act of 1942. Ever wonder how how all those returning GIs were able to find jobs in a peacetime economy? Now you know.
Sorry this post has been so long, but the draw of families to live off the land and to acheive more independence will continue to be hamstrug by today's Keynesian economics that undermine a rural living wage. A drive through any rural area of any State will show boarded up downtown businesses. Rural America is hurting badly, but fighting for higher domestic commodity prices will naturally spin out wealth across our country and the larger economy to the benefit of all including city dwellers. Carl Wilkens' contributions show at least one economic model compatible with Biblical teaching on the created world that when worked with stewardship will result in great material blessing. This private wealth creation would certainly also provide the economic platform for greater social justice and for a wide range of diaconal and evangelistic activity.
Would appreciate your thoughts. Thanks.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home