Tuesday, November 6, 2007

The American economy, it seems, is completely built on debt and over-consumption, so if we stopped over-consuming, our economy wouldn't work. How do you see it working out that the economy could survive a massive down-shift in consumption?

I thought I'd address these questions here for everyone to read.

We discussed these issues in class just last week. And they are things which I have been thinking a lot about, especially since my post on other-centeredness.

While it is true that the American economy is built on over-consumption and debt, that does not mean that is the way it must be. There are actually indications that say this is not sustainable. Obviously, everyone can see why--there is no way to maintain this amount of debt and not feel the repercussions long-term. you wouldn't doing it in your personal finances and we shouldn't keep it up as a nation.

My greatest concern is what the debt actually looks like. A large majority of the national debt (hovering over $9 trillion now) is held by China. Their economy is the only economy that can afford to buy the treasury bonds on the open market. Having China (or anyone for that matter) hold that much of a stake in our economy is not healthy. If ever there is an international crisis and they pull out their investment then we would be in a much worse situation.

So, while an overnight shift away from over-consumption would collapse the economy, a gradual reduction in reliance upon Chinese investment and consumption in general would not force us to rely so heavily on going into debt. The American economy is used to very healthy and large economic growth. Typically growth in the 3% range is good. America has had a steady growth rate in the 7% range, and in the 60's - 80's that growth was double digits. We have been spoiled (well, the wealthy have been spoiled, but that's for a different post) with high growth numbers.

So, if we were to reduce our consumption of goods and live lives not so heavily oreinted on ourselves and our "needs" the economy could still function and, some would argue, that would actually allow the economy to become more sustainable in the long run.

The examples of this is in parts of Western Europe, where after periods of extreme growth they have leveled off. May Americans cringe at using Western Europe as an example of good economies because there are also downfalls that come with those economies (very high unemployment rates, high taxes, etc.) but there are very good reasons for those downfalls.

So, to summarize, if Americans stopped buying stuff overnight then yes, it seems as though the economy would collapse. But, if there was a steady readjustment of priorities and spending habits then I believe the market would adjust and growth would level off at a steady and healthy rate.

Now playing: The Robbie Seay Band - Beautiful Scandalous Night
via FoxyTunes

Saturday, November 3, 2007

A little slice of the Northwest...

I recently commented on gatheringinlight about what my "perfect day" would be like. You can go read exactly what I said, but most all of the things in my perfect day would happen in Oregon.

One of the things was to be able to spend some time at a used book store. I would choose Powell's, but really any would do.

I've been reading a ton of thick books for school and have been wanting to have some leisure reading (not that I have time). I was thinking about book that I haven't been able to read but would like to and one of my favorite authors came to mind. David James Duncan came to mind. He's a native Oregonian and a great story-teller. Well, recently I was looking for any of his books through the local library system. None were to be found. I was bummed, but not that bummed since I really don't have time to read for pleasure anyway.

Today as I walked to the library to study I noticed that in the basement of the library they are holding a massive book sale. I walked in just to browse. As I went in one of the back rooms, passed the stacks and stacks of romance and mysteries, I saw it...

I may wait until Christmas to break into this book, but I'm excited to have a way to escape to the Northwest, even for a few minutes a day.

Now playing: The Robbie Seay Band - Go Outside

Thursday, November 1, 2007

In an MBA course of study it is implied that one is ready to engage in the current economic system that dominates the world: capitalism. I have appreciated the program here at Eastern because they don't make that assumption. Each professor acknowledges the reality that capitalism is not an ideal situation, it is simply the situation in which we find ourselves, the reality of the modern context. Some professors believe in the market system more than others, but overall there is a sense that they recognize the failures and know that reliance upon God comes before reliance upon any system made by humanity.

Because of the failures of capitalism (greed, consumerism, lack of social responsibility) many people wish to abandon that system altogether. I once was one of these people. As a Quaker and an idealist I constantly judged the capitalist structure for the evils that it produced. Now, through this program, from our readings and discussions, I've been challenged to rethink my position. (Don't hear me wrong, there are still evils in capitalism and I still judge them.)

So, instead of adopting a socialist economic system, I am convinced we must re-orient the realities of the market system.

What are those realities? Market systems are based on relationship, choice, and voluntary exchange. Socialism is based on egalitarian ideals (which I don't believe are necessarily explicit in Scripture), forced exchange (which removes the heart and impact of the action), it removes incentive (motivation to work, serve, love) all of which can mar the image of God in humanity.

Seeing these realities, what are the alternatives?

It seems to me that instead of choosing an alternative which centralizes control and forces exchange, I believe that we must reshape the capitalist system from the ground up. Self-interest is a reality in humanity and capitalism. Self-interest is what drives greed, materialism, power, consumerism, and wealth. I believe that instead of abandoning the capitalist system we must reshape it so that we become other-interested. In our other-interestedness we can then use the opportunity created by capitalism to encourage voluntary exchange (charity, community, etc.) to enrich the lives of others.

Many people try and use the parable of the rich young ruler and the early church in Acts as arguments away from a wealth-creating capitalist system. Both of these examples, I believe, miss the mark. In the rich young ruler, Christ is exposing the realities of the young ruler's life and challenging him to do away with that which gets in his way of God. Jesus did not deny the reality that there will be rich and poor, instead he seemed to challenge the ways in which the rich view their money and showed that true devotion is good stewardship of that money.

The early church also pooled their resources. But the reality is that they were just that... their resources. This means that the members of the Church had private property rights and gave willingly the resources they had gained.

Finally, capitalism is driven by the mindset that we must consume more, and therefore we must produce more. But, in reality, that is not the only option. If, instead, we lived within our means and desired less, then we would not have to produce more and get into the perpetual cycle of consumption that we find ourselves. And a decreased desire to consume would shift the economic factors of supply and demand and would not necessarily adversely affect the economy in the long-term. It would also possibly balance out our national debt if we were able to slow our consumption to a steady rate. We would therefore rely less heavily on Chinese investment.

So, if we shift our thinking to be more other-oriented, willing to give, and able to desire less, I believe we would not see the evils of capitalism as starkly as we do. Obviously there will be problems no matter which system we adopt, but I'm seeing the good that market economies have brought the world and also the need, as followers of Christ, to reorient our minds.