A Moral Goal For Economics

"Now at last we are setting ourselves seriously to inquire whether it is
necessary that there should be any so called ‘‘lower classes’’ at all: that is
whether there need be large numbers of people doomed from their birth to
hard work in order to provide for others the requisites of a refined and
cultured life; while they themselves are prevented by their poverty and toil
from having any share or part in that life . . . the answer depends in a great
measure upon facts and inferences, which are within the province of
economics; and this is it which gives to economic studies their chief and their
highest interest."

Alfred Marshall Principals 1890, pp. 3-4


My comment: In this political season, I am appalled at the number of elected or aspiring political figures who seem to believe the object of our economy is the continued and increasing wealth of the wealthy rather than the prosperity of all. This is the overriding moral conflict of our time. Marshall's serious inquiry is not yet completed.

We once had the tools to create general prosperity. We have let them freeze up with rust from disuse and a lack of moral willpower.

This moral failing has been aided and abetted by neo classical economists seduced by the mathematics of the Polish mathematician Walras. Walras' theories fall short in part because pure homo economicus does not exist. Humans by nature are cooperative beings who live in groups and are motivated by what seems fair, rather than what maximizes their own economic gain. That is, normal people are so motivated.

Ideas Of Government

"There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."

William Jennings Bryan, 1896

Seventy Years Ago: Guadalcanal

September 28, 1942. Sixty-two Japanese planes attacked Guadalcanal, U.S. defenders shot down 23 aircraft, losing only one of their own. 

Good for morale. Many struggles ahead, though.

Ed Credle: Patriot And Servant Of The People

Last weekend, Mr. Ed Credle, one of Pamlico County's most good and faithful servants, passed away. The county has lost a wonderful gentleman who served our community well.

Ed did not seek the limelight, he merely sought to serve. Over the years, Mr. Credle served as a town commissioner, but most memorably, he served on the Pamlico County Board of Elections.

I don't have a list of the exact years that Ed served the voters of Pamlico County. His terms were not entirely consecutive, but they add up to about two decades.

He was an inspiration to me and a source of valuable perspective on election matters. He will be sorely missed.

Ed Credle will be laid to rest this coming Saturday at the Missionary Baptist Church in Mesic.

The finest tribute any of our citizens can pay to the memory of Ed Credle is to vote in the 2012 election.

Seventy Years Ago: Brisbane, Australia

The convoy carrying the 27th Air Depot Group docked at Brisbane, Australia September 24, 1942. Brisbane is in Southern Queensland. They established a temporary headquarters west of Ipswich at Amberly airfield.

Destination: Port Moresby, Papua New Guinea. Facilities at the destination: nonexistent. The roughly 900 men of the Group would have to build the facilities themselves. With inadequate tools.

For the next three months, the Air Depot Group unloaded and sorted out their equipment and continued training for their mission. One of the tasks: obtain heavy equipment to use in building their own warehouses, hangars and campsites.

It would be early December before the group arrived at Port Moresby.

Fascism

I had a conversation last evening with a Korean War veteran. The veteran shared a thought from an earlier time: "If Fascism comes here, it will arrive wrapped in the American flag."

A thought worth pondering.

I think it will also wear the armor of hate.

The conversation also calls to mind an earlier comment I posted about democracy.

Middle Class

Both recent political conventions had a lot to say about the "middle class."  As I listened to the speeches, I realized I don't know what the term means.

I tried to develop my thinking in the course of a recent facebook exchange with a friend who called attention to an editorial by David Brooks. The friend challenged her friends to comment:

The article:

Thurston Howell Romney

www.nytimes.com

Did you hear about Mitt Romney’s comments from a fund-raiser a few weeks ago? They seemed to suggest that Romney doesn’t understand America.

• Facebook  Comments:
  
  RT: He's not a liberal, but he's a fan of President Obama. Hard to square those two. ... I do agree with Governor Romney that there is a dependent class... they work hard, they want better lives for their kids, all that is true. But they are becoming dependent on government more and more. And with that dependence comes control. ... As to President Obama, I believe his understanding of America is much less realistic than his opponent's.

  September 18 at 10:08am ·
• 
  

  KK: Do you buy Romney's number of the middle class being those who make ~250K?

  September 18 at 10:32am ·
• 
  

  RT: I must confess I'm not an expert on Romney's statements about what constitutes the middle class. There isn't an official definiition after all... Cf Obama's promises about never raising taxes on people earning under $250k a year (a promise he broke in April 2009). I understand if you may not want to give Romney credit for any intelligence... but let's be realistic. He has been governor of a state... he campaigns every day to real Americans... his campaign team no doubt makes sure he knows the price of a gallon of milk.

  September 18 at 10:37am · 
• 
  

  RT: I find most people think "rich" is some number, say 10% more than they make.

  September 18 at 10:41am
• DC: For what it's worth - 2% of American households have income above $250,000. Is that the middle?
• September 18 at 10:54am ·
• 
  

  RT: What would you call the middle class Mr. Cox?

  September 18 at 11:18am · 
• 
  

  David Cox That's a really good question, and I don't have a succinct answer.  I'm not sure that income is a useful dividing line. It is possible to divide the population into income by quintiles (20% units). Any household with income above 250K is way up in the top 10% of the top quintile. Working class doesn't work because of the historic association of that term with blue collar, factory workers, tradesmen and craftsmen. What is lacking is a term that collects people with common economic interests in the present world, namely everyone who works for salary or wages. It seems clear to me that wealthy individuals look down on anyone who lives on a paycheck. How about "Polloi?"

  September 18 at 12:05pm 
• 
  

  RT: I dispute the premise that "wealthy individuals look down..." If you were saying something like that about blacks or women or whatever, we would be calling you a racist, sexist, etc. And if you cannot define "middle class" then surely you don't quarrel with someone else's definition, whatever it might be, right ;-) ?

  September 18 at 4:06pm · 
• 
  

  David Cox Why must I define "middle class?" It isn't a term I use, because I'm not sure it has any clear or useful meaning. I know what "quintile" and "quartile" mean and am comfortable using them to convey information about income. "Class" itself is a word that also fails to convey precise meaning. It once meant something reasonably useful, though not precise. "Upper class" conveyed a set of attitudes, education and speech as well as a certain degree of wealth. "Lower class" also conveyed something about the people thought to be included. In some circles, it was a synonym for "trailer trash." "Middle Class" was presumably somewhere in between, ordinary people as it were. In my experience that set of terms never fit southern society very well. Oh, yes, people also spoke of "Southern Aristocrats." There was a certain manner of speaking - at least among the women. A kind of soft Southern drawl with genteel accents. They had been to finishing school and knew how to prepare tea. To be in this category when I was growing up in Mississippi usually meant that sometime in the distant past, an ancestor had owned a plantation. Southern aristocrats didn't come from business. Faulkner captured the distinction perfectly in his stories of the Compsons (aristocrats increasingly down on their luck) and the despised but up and coming Snopeses. Oh, yes, there were also "yeoman farmers." Those were the ones who had never had slaves. Out of all that melange, I fail to see the usefulness of "middle class" as a category. If you find it useful, by all means use it.
  
  As for "looking down on" that may not have precisely conveyed my point. I read postings from right wing sources talking about the "lucky duckies" who pay no income taxes. I watched the Republican convention. The message I keep hearing is one of disdain for people who work for salary or wages, rather than living on earnings from stocks and bonds. I don't think that is true of all wealthy people. I don't think it is only wealthy people who think along those lines. But it seems to me there exists a rentier class (bad word - how about "category") that does not esteem mechanics, plumbers, schoolteachers, engineers, or other folks who make and do stuff in the service of others. What to call them? I'm open to suggestions.

  September 18 at 7:17pm

Seventy Years Ago: Furthest Axis Advance

There can be any number of opinions as to the REAL turning points of World War II. In the Pacific, I choose the Doolittle raid as the event that changed Japanese prospects. The Battle of Midway is another candidate for turning point. But the failure of Japan to recapture Guadalcanal and consequent pullback in New Guinea made it clear to Japan that they were now on the defensive.

The November 1942 Allied invasion of North Africa (Operation Torch), preceded by German failure to control Malta, pointed to the end of German success in North Africa.

By Mid September the Soviet Union had stalled the German advance at Stalingrad, Moscow and Leningrad.

The Winter of 42-43 proved the high water mark of the Axis advance.

When Churchill announced to Parliament in November 1942 that it was perhaps the "end of the beginning" of World War II, it was an apt description.