[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

Immediate Use of Ivermectin Medicine Globally Can End COVID-19 Pandemic: Scientists

COVID Fraud – Lawyers & Medical Experts start legal proceedings against W.H.O and World Leaders for ‘Crimes against Humanity’

School Board Nazi struggles to breathe while she orders kids to wear masks…

Warren says she'll run for reelection to Senate

WiThheld rouTers ... The laTesT of many roadblocks --- To Arizona SenaTe's audiT of 2020 elecTion

Windham ResidenTs ... Refuse --- To Be Silenced

When Cruelty Actually Is The Point

Fauci's agency spent over $400k on experiments grafting aborted fetal scalps onto mice and rats

Who Is Bill Gates? (Full Documentary, 2020)

Here Is What Republican Voters Really Believe in. It's a Shame the GOP Has No Idea

guTTing america ... going back --- on Track

“The ElecTion is Over”... Trump HaTer Cindy McCain Trashes Arizona ElecTion AudiT ---“Ludicrous” (VIDEO)

DissidenT Episcopalians awarded $100 million worTh of property ... as U.S. Supreme CourT --- declines To Take up Fort WorTh case

Joe Biden needs to stop lying about the cause of the border crisis and start fixing it

George W. Bush says ... The Republican ParTy has a shoT aT fuTure elecTions if iT curbs --- iTs 'whiTe Anglo-Saxon ProTesTanTism' ( heriTage )

BREAKING EXCLUSIVE - TGP’s Jordan Conradson InTerviews AZ AudiT DirecTor Ken BenneTT — HUGE DEVELOPMENTS ... Including Plans To Triple OuTpuT --- QuesTions on Number of FraudulenT BalloTs (VIDEO)

Can Democrats Avoid a Wipeout in 2022?

Biden declares war on America -- literally

Former Trump assisTanT says ... 'freighT Train' of elecTion resulT audiTs coming --- 'The MAGA movemenT is demanding answers'

Tim Scott's 2024 Star Rises After Biden Rebuttal

“We Will Find MisTakes – IrregulariTies ... We Probably Are Going To Find OuTright Fraud” --- AZ GOP Chair Dr. Kelli Ward Give - UpdaTe on HisToric AudiT (VIDEO)

Australia security official warns nations are ‘beating drums’ of war amid Asia-Pacific tensions

Former Obama White House advisor Seth Andrew arrested, accused of stealing from charter school he founded

This is fo sucking funny ... Joe has no clue --- The dumbocrap leaders are in a hearT aTTack panic!!.

The voter suppression lie

War Room ... Rachel Maddow Is Worried abouT whaT AZ ElecTion AudiT will Find — She Knows Georgia Is NexT

Conspiracy Queen Rachel Maddow ... Panics Over --- ‘Dangerous’ Arizona Vote AudiT

‘True To iTs docTrine’ ... ConservaTives plan for a new church afTer UniTed MeThodism spliTs --- over homosexualiTy debaTe

Michael Eric Dyson - WhiTe People Can Help BLM ...by Holding RacisT RelaTives --- ‘To AccounT’ aT Thanksgiving

Derek Chauvin ... The GreaT --- WhiTe DefendanT

New Mexico state trooper executed by Mexican cartel member… Horrific Video

John Kerry in Earth Day wonderland

Democrats Are Cheaters

Derek Chauvin's FaTe ... Is Now in The Hands --- of The Jury

Fools' overture

Democrats Are Terrified of Georgia

Climate Media vs. Climate Science

Why We Black Leaders Support Voter ID Laws

Pelosi: ‘No Plans' to Bring a Court-Packing Bill to the House Floor – at This Time

B-1 Bombers Are Deploying To Norway For The First Time With An Eye On Nearby Russia And The Arctic

High School Coach Fired After Refusing To Enforce “Insane” Outdoor Masks During Sports

CNN Says Chinese-Style Fonts Are Racist

Gran Torino Denounced for Anti-Asian Racism

'It Is Still Not Safe To Go Outside,' Says Fauci's Head In A Jar In Year 2739

Biden Re-Ignites the Waco Fire

Over 500 White People Have Been Killed By Cops Since 2020. There Has Been No Rioting Over Those Deaths.

Buttigieg on Exaggerated Infrastructure Jobs Estimate: ‘I Should Have Been More Precise’

Videos - ChrisTians Tear Down MeTal Fences ... Denounce The Closure Of GraceLife Church --- Due To A COVID-19 ResTricTions

Pete BuTTigieg ... To evangelical vaccine hold-ouTs --- Maybe iT's parT of God's plan

TINHORN FLATS ... The Symbol of Modern Day America --- AgainsT Tyranny


Status: Not Logged In; Sign In

Business
See other Business Articles

Title: Fragility And Instability Are Part Of Global Capitalism And We Have Done Very Little To Address This
Source: World Political Economy
URL Source: http://www.worldpoliticaleconomy.com/site/?p=517
Published: Mar 26, 2012
Author: Riaan Nel
Post Date: 2016-04-29 04:42:02 by A Pole
Keywords: wages, money, debt
Views: 576
Comments: 9

“A sophisticated, complex, and dynamic financial system such as ours endogenously generates serious destabilizing forces so that serious depressions are natural consequences of noninterventionist capitalism:  finance cannot be left to free markets”  (Hyman Minsky, 1986) 

During the 80’s and 90’s the above quote by Minsky was very controversial.  That was the zenith of the “free markets” ideology – the notion that the less government interferes with the market the more efficient the market will allocate resources.  To a large degree I still agree with this basic notion; however, it is my belief that finance and investment do not work well in a non-interventionist environment.  Hyman Minsky’s theory about capitalist development and financial instability is how I view global finance in general, and how I view investment strategy specifically.  

From Minsky’s perspective the economy was a complex, time-dependent system.  He saw society as an “evolutionary beast,” changing in response to endogenous forces.  According to Minsky the fundamental determinant of the path of capitalist development is the institutional structure of the political economy.  It is this structure that regulates, facilitates, influences and constrains political economic activity.  Consequently, capitalism has many varieties.  In Minsky’s thinking time-dependency is an important structural variable of contemporary capitalism – production precedes exchange, and finance precedes production.  Thus, credit creation is at the center of capitalist development. 

Another important element of Minsky’s approach was the importance of profit-driven structural change.  Minsky had long argued that present and prospective profits influence economic activity within the context of a given institutional structure.  Most contemporary economic theories see finance and credit creation as merely a facilitating process within the economy.  This view ignores the fact that financial firms are also profit-seeking institutions, and that credit creation is a production process in and of itself.  Moreover, credit creation is a profit-seeking production process that precedes other production activities in time.  The financial system takes on special importance according to Minsky’s theory of capitalist development since the system exerts a strong influence on business activity, and is also prone to innovations in profit driven credit production.  Another essential element in Minsky’s theory is public policy.  In Minsky’s view capitalist development cannot be understood without incorporating government policy.  Government policy is an inescapable determinant of the path of  capitalist development.  In summation – a particular capitalist political economic system is created by profit-seeking credit creation, preceding other capitalist production and distribution processes, as well as government policy.  

Minsky identified five stages in the historical evolution of capitalism in the US. 

  1. Merchant Capitalism (1607-1813)
  2. Industrial Capitalism (1813-1890)
  3. Banker Capitalism (1890-1933)
  4. Managerial Capitalism (1933-1982)
  5. Money-Manager Capitalism (1982 – present)     

Due to postwar prosperity and the Federal Reserve System stepping in as a lender of last resort through monetary interventions, the financial system became more fragile.  The fragility stemmed from increased risk taking due to reductions in margins motivated by consistent Federal Reserve interventions.  Lender of last resort interventions and prosperity also encouraged greater reliance on debt financing, and a turn toward short-term financing.  The current phase of US capitalism according to Minsky evolved  due to an exponential increase in the activities of finance companies and non-bank financial institutions.  Concomitantly, we witnessed an increase in financial innovations like securitization and off-balance sheet entities (the rise of the shadow banking system).  Money-Manager Capitalism supplanted Managerial Capitalism due to the rising importance of managed-money funds – pension funds, mutual funds, bank trust funds, etc.  Where corporate managers were the “masters of the private economy,” money-managers on Wall Street became the new “masters of the universe.”  Between 1950 and 1990, money managers saw the fraction of US corporate equities under their control grow from 8% to 60%.  Over the same period, pension funds increased their ownership of US business stock from 1% to 39%, and also increased their percentage ownership of US corporate bonds from 13% to 50%.  These percentages grew through the 1990’s into the 2000’s.  

Money managers’ raison d’être is to maximize return for investors in their funds, making them increasingly sensitive to short-term profits and the stock-market valuations of their firms.  The increase in the number of institutional investors provided ready buyers for securitized investments.  Throughout the period of Money-Manager Capitalism government policy had two characteristics, namely lender of last resort stabilization and a dismantling of the New Deal’s financial regulations in line with the financial growth model. In 1990 Minsky contended that Money-Manager Capitalism was going global, and that it was rendering obsolete the notion that trade patterns determined short-run foreign exchange rates.  He pointed out that global Money-Manager Capitalism would require a division of responsibilities to maintain stability.  Hegemonic stability by one power would not suffice.  In 1995, a year before his passing, Minsky hinted at the future of global Money-Manager Capitalism.

 “Global financial integration is likely to characterize the next era of expansive capitalism.  The problem of finance that will emerge is whether the financial and fiscal control and support institutions of national governments can contain both the consequences of global financial fragility and an international debt deflation”  

At this junction I would like to define “capitalism” since the implication of Minsky’s theory of capitalist development is that contemporary capitalism is essentially a financial system.  While there is little consensus on a definition, many definitions focus on the fact that capitalism is an economic system characterized by private property rights and the seeking of a profit.  The following is a common definition of capitalism. 

      ”[Capitalism is a]n economic arrangement, defined by the predominant existence of capital and wage labor, the former consisting of accumulation in the hands of private (i.e. non-governmental) owners, including corporations and joint stock   companies, the latter consisting in the activities of laborers, who exchange their labor hours (or, according to Marxian theory, their labor power) for wages, paid from the stock of capital.  The capitalist extracts not a wage but a profit, by realizing in a market the value of the goods produced.  Capitalism presupposes private property in the means of production, a market economy, and the division of labor” (Scruton, 1982).

 What is missing from the above definition is the clear explication that capitalism is essentially a financial system.  Moreover, the peculiar behavioral attributes of a capitalist political economy center around the impact of finance upon system behavior.  Mehrling (2000) provides a succinct explanation of Minsky’s conceptualization of capitalism as being essentially a financial system.  In a capitalist economy every economic unit – every firm, household, individual, government and nation – is in essential respects like a bank facing the problem of daily balancing cash inflows against cash outflow.  The key problem that every economic unit faces is the “survival constraint,” which necessitates that cash outflows not exceed cash inflow.  All individual economic units each and every day have to make a multitude of decisions to meet this constraint, and these decisions in aggregate influence the structure of the capitalist system. 

Because of the nature of capitalist production and distribution, economic units invariably face cash flow issues when cash flow falls short of required or desired outflows.  Economic units require a source of refinance that will allow them to promise future cash flow in exchange for credit to meet current cash flow requirements.  For Minsky the heart of the financial system, and by extension the heart of the capitalist system, is the money markets.  The money market is the place where economic units meet one another to adjudicate their competing needs to refinance.  The most critical asset-price in the political economy is the price of refinance – the short-term money market rate of interest.  The money market is the place where the coherence of the entire system is tested daily. 

What appear to us as assets are in actuality nothing more than expectations about future cash flows.  Minsky distinguishes between two types of capital assets, namely financial capital assets and non-financial capital assets.  A financial capital asset is two-sided since it is comprised of future cash outflows from a debtor and future cash inflows to a creditor.  All other assets are only one-sided since the receiver of future cash flows receives the flows from the production and distribution process.  If economic units aim to meet their survival constraint by keeping their cash outflow within the limits of their cash inflows emerging from their ownership of non-financial assets, the system is stable.  However, capitalism requires credit or financing.  This is where Minsky’s concept of time-dependency comes into play.  Before most products or services can be distributed they have to be produced; however, production and distribution will require cash outflow before cash inflows are realized.  Credit needs to be accessed to facilitate the process.  Credit is also accessed by economic units to achieve more than otherwise possible by merely matching current cash outflows with inflows.  For instance, most households would never be able to afford the luxury of a modern home if not for exchanging their future cash inflow for present cash outflow through a mortgage.  By the same token, governments and politicians aim to increase the standard of living of their nations by accessing credit through deficit spending.

 Credit is about the issuing of financial assets to trade future cash flows – for instance government bonds are issued to finance government programs over and above current tax inflows, with the promise to use future tax inflows to redeem the bonds at maturity.  A crucial point about borrowing and credit in Minsky’s theory is that it does not relax the survival constraint of a particular state-society complex in the aggregate.  This is due to the two-sided nature of financial assets – they only transfer the constraint from one economic unit to another.  The only way for a state-society complex to relax the survival constraint in the aggregate is through the creation of new non-financial capital assets through investment. 

 On the level of analysis of individual economic units the incentive of investment is the expectation that current investment will be profitable in the future, i.e. the future cash inflows are expected to exceed by some margin the cash payment commitments required to finance the initial investment.  This represents a potential relaxation of the survival constraint, thereby functioning as a powerful incentive factoring into the decision making of individual economic units.  However, these decisions cause instability on the aggregate level – what Minsky refers to as “upward instability”. 

 This “upward instability” lies at the heart of his theory of financial instability.  Minsky originally referred to the process of fragility over time in the capitalist system as the financial instability hypothesis.  The cause of the instability is obvious – some investments work out and others do not, but the debt-financed owners of both face the same cash commitments.  Think of Greece’s recent struggles to meet their debt servicing commitments due to poor governmental investment.

 “At the aggregate level, the natural upward instability of the system leaves behind a residue of financial commitments that pose problems for the continuation of growth.  At the individual level, these problems take the form of a sharply binding survival constraint that forces distressed units to reduce expenditure, sell assets, and/or borrow at high interest rates, all in order to raise cash to meet immediate commitments.  At the level of the market, the problems            of individuals are reflected in conditions in the money market, which means at the very least a higher price of refinance, and at the worst a disruption and even breakdown of exchange.  If the money market is the heart of the system, then financial crisis is the heart attack”  (Mehrling, 2000).

 If the premise is accepted that the current political economic system is financial in nature, then the financial crisis represents a challenge to the structural cohesion of the entire system.  As a challenge to the “efficient market hypothesis”, which is the dominant financial economic theory of our time, Minsky formulated his “financial instability hypothesis.”  The efficient market hypothesis states that individuals may guess asset prices wrong, but the market as a whole gets them right.  Minsky’s hypothesis claims the financial structure of a capitalist political economy becomes more fragile over a period of prosperity.  As the economy grows and profits increase those businesses in highly profitable areas of the economy are rewarded handsomely for increasing the amount of debt they use.  This success encourages others to increase their leverage so as to increase their profits.  The increasing profits fuel the creation of credit as lenders are satisfied by the ever increasing profits regarding borrowers’ ability to repay the loans. 

 The capital development of a capitalist economy is accompanied by exchanges of present money for future money. Present money finances the resources for the production of investment output. Future money is the profit that will accrue to the owners of capital assets. Investment by producers is financed through liabilities. Money is connected with financing through time, with banks and financial intermediaries as the central players. The key economic exchanges are the negotiations between financial intermediaries and businesspeople.  These negotiations revolve around the cost and profit expectations of businesspeople.  Money flows from depositors to banks, and then from banks to firms and companies needing investment financing. Money also flows from investors to investment funds, and from these funds to companies or governments needing investment finance.  At a future date the flow is from firms, companies and governments back to banks and funds, and then to the depositors and investors.  This flow is important to understand since it explains the linkage between the creation and ownership of capital assets on the one hand, and the structure of financial relations and changes in this structure on the other.  The financial instability hypothesis attempts to explain the impact of debt on system behavior. Bankers (the generic term Minsky uses to depict all financial intermediaries) are key players in his theory as merchants and innovators of debt.

 Minsky identifies three different types of income-debt relationships, namely, hedge, speculative and Ponzi finance.  Hedge Financing Units can fulfill all of their contractual payment obligations by their cash inflows.  These Units’ cash inflow allow them to pay both interest and principal on their liabilities.  However, as economies, earnings and profits grow – over protracted periods of good times – the economy will transit to a structure with an increase in so-called Speculative Finance UnitsSpeculative Finance Units can meet their payment commitments, although their cash inflow will not allow them to repay the principle, requiring them to roll over their liabilities. The US government is the largest Speculative Finance Unit in the world.  It can make interest payments on all outstanding US bonds, but does not have adequate cash inflows to honor redemptions at maturity.  When older bonds come due, new Treasuries are issued to honor redemptions.  Lastly as the economy continues to prosper, more Ponzi Financing Units will become part of the structure.  Ponzi Financing Units cannot fulfill either repayment of principle or the interest due on outstanding debts from cash inflows from operations, requiring them to borrow more to pay interest commitments, or sell assets to fulfill commitments.  Regarding these three debt regimes Minsky (1992) states:

 “It can be shown that if hedge financing dominates, then the economy may well be an equilibrium-seeking and containing system. In contrast, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy is a deviation amplifying system. The first theorem of the financial instability hypothesis is that the economy has financing regimes under which it is stable, and financing regimes in which it is unstable. The second theorem of the financial instability hypothesis is that over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system.”

 A Minsky Moment occurs when Ponzi Financing Units are forced to sell assets to meet their obligations.  It is that moment in the business and credit cycle when financing units have such severe cash flow problems due to the increasing debt that large scale selloffs begin which leads to a precipitous collapse of market prices and a sharp drop in market liquidity.   The phrase “Minsky Moment” was coined by Paul McCulley, a director at Pacific Investment Management Company during the 1998 Russian debt crisis.  Although McCulley originated the term it is George Magnus, senior economic advisor at UBS that offers perhaps the most succinct explanation. 

 ”…the stage is first set by ‘a prolonged period of rapid acceleration of debt’ in which more traditional and benign borrowing is steadily replaced by borrowing that depends on new debt to repay existing loans.  Then the ‘moment’ occurs, ‘when lenders become increasingly cautious or restrictive, and when it isn’t only overleveraged structures that encounter financing difficulties.  At this juncture, the risks of systemic economic contraction and asset deprecation become all too vivid.’ “

 Both Bear Stearns and Lehman Brothers are examples of Ponzi Financing Units that collapsed during a Minsky Moment in 2007.  Greece is the prime example of a country that is a Ponzi Financing Unit requiring a bail out by an EU and IMF rescue package during its Minsky Moment.  Households that purchased homes with no-down payment mortgages at teaser rates, depending on an increase in the value of the home to refinance in the future to affordable payments, are also examples of Ponzi Finance Units.  There is wide concern by purchasers of US Treasuries that the US government is about to become a Ponizi Financing Unit.  If the US government should have a Minsky Moment the current global political economic system might collapse.

 I remain of the opinion we have done very little to address this inherent instability of our economic and financial system. 

 

Important Information:

This article was written by Mr. Nel in his capacity as a freelance global political and economic journalist and editor of www.World-Political-Economy.com, a commentary blog site.  Mr. Nel’s strategy comments are made independent from his position as managing partner of Detlefsen Nel & Associates, and are not endorsed by the firm.  The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.  

Click for Full Text!(1 image)

Post Comment   Private Reply   Ignore Thread  


TopPage UpFull ThreadPage DownBottom/Latest

#1. To: A Pole (#0)

Something that has not been done in any notable manner is an economic analysis of the economic system prescribed by God to ancient Israel in the Torah, and recalled repeatedly by the Prophets until its restatement by Jesus.

Aspects of it have been emphasized, overemphasized and underemphasized, but there has been no comprehensive work of note that describes how it all works together in economic terms.

The reason not is that only religious people study those texts in sufficient depth to be able to discern the position, and the religions themselves have rejected God's economic plan and developed thick traditions whereby they can ignore it and substitute their own judgment. So Gods economics remain as inert words on a page, mostly unused.

It is my belief that the way out of the seemingly intractable mess in which we find ourselves, whether communist, capitalist, socialist or traditionalist, is by reading God's economics as inspired and actually applying the entire program.

Since that cannot be even thought of sight unseen, first thing to do is to lay out God's economics.

But here, immediately, we run into crushing opposition before we start. Atheists, agnostics and economic professionals do not care - they think it's all bunk and not worth the time. And Jews and Christians have spent such fantastic amounts of energy over the millennia devising doctrines to overthrow God's law of economics, and to ignore and suppress it, and to tell themselves that it's ok to do so, that the instant one begins to present that law, the Christian will start to throw out objection after objection - many of them quite old - all to escape from God's wisdom on the subject. The Jew will just shrug his shoulders and walk away.

So, God can't get a fair hearing unless some brave soul is willing to be just absolutely pounded upon and vilifed by people claiming to be children of God, but who think of themselves as grown up children who will not be governed by their Father when it comes to MONEY. Contributions are good enough.

Still, I'm in a particularly contrary mood lately, so I think I will go ahead and put out God's economics, the whole structure, to give atheists and Christians something to sneer at. (Which means, in the latter case, give Christians the opportunity to sneer at ME, because they won't directly sneer at God in word, just in deed.)

I'll begin later today.

Vicomte13  posted on  2016-04-29   6:59:04 ET  Reply   Trace   Private Reply  


#2. To: Vicomte13 (#1)

It is my belief that the way out of the seemingly intractable mess in which we find ourselves, whether communist, capitalist, socialist or traditionalist, is by reading God's economics as inspired and actually applying the entire program.

You are right. What we need to do immediately is trash our economic system and replace the federal reserve with the Vatican Bank!

What could possibly go wrong?

BOYCOTT PAYPAL AND CLOSE YOUR PP ACCOUNTS NOW! ENCOURAGE OTHERS TO DO SO,TOO!

ISLAM MEANS SUBMISSION!

Why is democracy held in such high esteem when it’s the enemy of the minority and makes all rights relative to the dictates of the majority? (Ron Paul,2012)

American Indians had open borders. Look at how well that worked out for them.

sneakypete  posted on  2016-04-29   13:07:10 ET  Reply   Trace   Private Reply  


#3. To: Vicomte13 (#1)

I think I will go ahead and put out God's economics, the whole structure

Looking forward to it!

A government strong enough to impose your standards is strong enough to ban them.

ConservingFreedom  posted on  2016-04-29   13:33:52 ET  Reply   Trace   Private Reply  


#4. To: sneakypete (#2)

You are right. What we need to do immediately is trash our economic system and replace the federal reserve with the Vatican Bank!

Well, that's a ridiculous proposal. Certainly that's not God's economics.

Vicomte13  posted on  2016-04-29   15:32:19 ET  Reply   Trace   Private Reply  


#5. To: ConservingFreedom (#3)

Looking forward to it!

Alright, then let's begin.

First, "economics" is derived from two Greek words: "oikos" which means home, and "nomos", which means rule or law. So "oikonomia" - economics - is the rule of the home., "housekeeping", if you will.

To us, "the home" is our own home, our own family. But from the Biblical perspective, God makes the whole of the land our human home, and the home for the animals too. The "oikos" that God is regulating in Scripture is the whole "kosmos" - the "world", the epoch.

We know at our level that everything in home economics impinges on everything else. If you spend money on travel, you don't have it for home repair, if you spend it on medicine you don't have it for clothing. Our entire economic concept is driven by the concept of scarcity. Value is not assigned to things by men based simply on how useful or necessary they are, but also on how scarce they are.

There is no single thing more valuable than the next oxygen-laden breath. We are, all of us, every animal, one single breath away from death. If we cannot get our next breath, we die. All of us. Our hearts can skip a beat, and then pick up the beat, but if we "miss" a breath, that's called dying. Our brain dies, quickly, and we're gone within a few minutes. If we can get that next breath, we're not.

So, there is nothing in the universe more precious than the next breath. Our lives vary in many ways, but the one thing that is absolutely common between us and every other animal is that our lives consist, at their root, of a chain of linked breaths going back to our birth or hatching. Had any of us been unable to draw the next breath - just one single breath - we would have died. Every creature that has died, did so because it came to a point where it could not take the next breath, and that was its end.

So, the most precious of all things is the very next oxygen-filled breath. And it is free. It's free because air is plentiful. The cost of a breath is far, far higher in a spacecraft or a submarine. There, whole systems have to be developed to keep supplying every breath. Oxygen was the limiter on submarine operations until the development of nuclear power, and it came at a high price for submarine crews, for they were at their most vulnerable when surfaced for air.

When it came to what animals and plants really need, the world, nature, which is to say God, provided it in abundance. For while we are limited and generally only think in terms of the house, the home, and then scale that upward, God had to consider the needs of everything from viruses to dinosaurs, and provide rules for everything to work all at once. Our economics is a smallbore microcosm of God's. We limit economics to certain things, but God's economics, of course, apply to everything. The Second Law of Thermodynamics, for example, is an example of divine economics.

Of course, the post that prompted this post was not talking about the divine physical economics of inert nature, but was focused on the money economy of our nation. Therefore we will not dwell in the physical sciences very long, although God's economics in the Bible begins there, with creation, and from a God's eye view there is no scarcity: God creates at will. When there is scarcity in nature, it is because God has made it so, in order to channel the activity of those who depend upon it.

In Hebrew (and Greek, and Latin) the word "breath" and the word "spirit" is the same word. In fact, it is we in English who bifurcate the idea of breath and spirit into two distinct things. Hebrew doesn't. If we admit that the Hebrew was inspired by God, then God is telling us something: THE most vital thing to life - the next breath - is provided free and superabundantly by God.

Likewise, the second most vital thing - water - was also provided, under the initial conditions, superabundantly by God: it came up through the ground.

And that made the third most vital thing - food for the animals - superabundant, for the ground was good for growing.

And the vital thing for plants - sunshine - was free and plentiful.

Under the original conditions, animals did not eat other animals. They ate plants, which ate sunlight, the plants were all good to eat, at least in the "pleasure garden" where God placed man, and the sunlight was sure and steady and warm - for man did not need clothing to live.

There was no scarcity. The economics of Eden were: there is always air, food, water and warmth. Free and superabundant. Therefore, man was to tend the garden, unsupervised, and reproduce. And the animals were simply to reproduce.

The earliest economics of God were: here is everything iyou need in superabundance, there is no scarcity, not of air, not of water, not of food, not of light and warmth. Therefore, man needed nothing whatever - no clothes, no shelter, no property, no defense. It was all free and abundant and provided directly, and God designed it that way. So, what was human activity to BE, then? Two things: tend the garden and the animals, and have sex.

We were designed to be the leaders of the animals and cultivator of plants, for pleasure, and to have sex at will and have as many children as God provided.

THAT is the original economics, the design economics of God. And it STILL IS the economics of the plants and the wild animals. They have no property. They eat what is freely given, drink freely, breathe freely, mate and have offspring.

Of course, now the world is fallen, and in the fall there is scarcity even for the animals. So animals eat animals, and when habitat is destroyed (by men or by disaster) the animals go hungry and die. This is not, however, by design. It is the result of the fall.

For men, the law of scarcity in economics began with the fall, and it began first in a non-obvious way: shame came with knowledge. God did not suddenly change the climate, forcing men to cover up. The climate stayed the same, for a time anyway. Man himself had changed, and suddenly the man and the woman sought to conceal their genitals. Sex, which had been free and shameless, became shameful to man. It still isn't for animals - they have no shame and no prudery. But even before God pronounced a sentence of other economic hardships on Adam and Eve, the mere knowledge of function and dysfuntion - "good" and "evil" - caused Adam and Eve to seek to cover their own nakedness from each other and from God.

And with that act, the economics of scarcity began to impose itself on mankind. For even if nothing else had changed, the fact that now man and woman would have to spend time weaving plants into clothes was an imposition on their time and liberty and joy.

Consider that today about a third of all crops grown in the world are for fiber, not food. Consider that in the Old South, the slave economy, the need for slavery, was not driven by the need to eat, but by the desire for profit from growing fibrous cotton for clothes, and tobacco for a mild escape from the pressures of the world , and we see on a grand scale how ONE imposition of scarcity and work - the need to clothe - cascades down among men into vast activities.

Note well too, God brought Adam and Eve animal skins to replace the leaves they were wearing. Now, whether God killed an animal to make those skins, or simply made the skins directly and brought them is impossible to say. Either way, it provided an example to the first men of the "easier" way to clothe themselves. But that "ease" came with it a change from leader of animals in peace to their killers, for their furs and skins - and this was 1500 years BEFORE God gave the animals to men to eat.

Had God just left it there, the new need for clothing, just that alone, broke the simple symmetry of free life that man enjoyed. But God further complicated the human economy by expelling man from the Garden, where all of the plants were edible and where eating was a matter of stretching forth the hand to eat fruit - and sending man out into a world where there were poisonous plants, unproductive trees, where man would have to till the ground to get enough food to eat, and where the process of tilling would not simply bring forth food, but also thistles and brambles. These men did not have tools, and were just getting clothes. Remove thistles with your bare hands. The labor demand on man went up considerably, both to make clothing and to try to extract food from a more hostile environment, one whose green plants are good for animals to eat, but often indigestible to man.

Man did ease his burden somewhat, by exercising his dominion over the animals through herding sheep and drinking their milk, and presumably using their fleece or perhaps their pelts. But man was still not given their meat to eat.

The female had her burden increased as well. The economics of childbirth ceased to be free. Great pain accompanied it, and frequently, death. In pre-medical days, 15% of deliveries, one in seven, resulted in the death of the woman. The death of a mother imposed dramatic burdens on the remainder of society for the raising of the children left without a mother, including the practical urgency of nursing the newborn whose mother was killed by his arrival.

A whole branch of medicine has evolved seeking to mitigate, to the extent possible, the agony and terrible risks of childbirth.

When a deer gives birth, the baby stands up and nurses a few minutes after birth. The doe cares for her calf, but is quite mobile.

When a human gives birth, she is left torn open and immobile for hours, even days. The baby is helpless. The vulnerability is extreme. God imposed all of that through the simple expedient of making birth hard for humans, specifically. Not so for the animals.

The biological REASON that human birth is so dangerous and traumatic is because the human head is HUGE compared to the body and the birth canal. Chimps, with smaller skulls, do not suffer the traumas and deaths in childbirth (of both babies and mothers) anywhere near what humans do. No animal does. The human infant's head size is THE thing that presents the threat to the life of the human mother.

Of course, the head size is ALSO the reason that man is the master animal: the head contains a huge brain. It is that brain that gives us the ability, above the animals, to distinguish function from disfunction, good from evil. The PRICE of having that ability is the agony of childbirth and potential for death of the human mother. And this was a choice of God, part of the divine economy.

Little changes by God: to basic things have major economic implications for the world.

For the fact of the helplessness of the human infant, the injured and quasi-helpless state of the human female in and after childbirth, the inability to graze from nature but the need to cultivate the soil both to feed and also to clothe ourselves - the very things imposed on mankind at the Fall, these things force humanity into patterns of organized behavior that rub up against our original design, which is not to be toiling workers for our food, clothing, shelter and security, but to be naturally at leisure, able to eat from the trees at will, leaders of animals, enjoying shameless, fruitful and easy sex lives, like all of the animals. It is God's economics, through things he imposed upon us, that makes us have to work harder than we want to, and accept constraint and direction much more than we want to.

It IS possible for us to live well and morally under the post-Fall economics, without resorting to violence and domination and destruction - but it is much SIMPLER to resort to violence and imposition and so men have to be exhorted to sacrifice a considerable degree of their own comfort. And that has proven to be a very hard sell.

God's laws for Israel were designed to work together to allow people to live in a moral, healthy way, a way still in accord with our nature, to be able to be reasonably happy, WITHOUT indulging in domination of other men. The Israelites were unwilling to stay with that path, in large part because too many men wanted more for themselves than God's law would permit - which meant that an imbalance would occur to the detriment of other men. That is exactly what happened, not just in Israel but everywhere, and it is what we face today.

We've spoken of natural economics. Next time, we'll discuss the integrated structure of the laws God gave to Israel, designed to allow men to live in accordance with their design in a fallen world, where it is much more difficult to do so than it was in Eden.

Vicomte13  posted on  2016-04-30   9:00:55 ET  Reply   Trace   Private Reply  


#6. To: Vicomte13 (#5)

Thanks for that! So far, so good. ;-D

A government strong enough to impose your standards is strong enough to ban them.

ConservingFreedom  posted on  2016-04-30   13:07:03 ET  Reply   Trace   Private Reply  


#7. To: Vicomte13 (#5)

So when will you give Christians the opportunity to sneer at you? ;-)

A government strong enough to impose your standards is strong enough to ban them.

ConservingFreedom  posted on  2016-05-03   12:47:44 ET  Reply   Trace   Private Reply  


#8. To: ConservingFreedom (#7)

The next part is the hard part, because it involves going systematically through the whole Mosaic Covenant, all of the laws God in the Torah.

Truth is, almost all of the Law that God gives in the Old Testament is in the Torah (the first five books). A little bit of hereditary land law is given in the book of Joshua. Samuel gives the "law of kings", but this is really a less, replacement law for the Israelites who refused to keep the law of God and have God as their direct ruler.

Jesus hits on many of the same themes in the Gospels, but there is a difference between the law of Christ and the Law of Moses. The latter is for a specific people in a specific land, under a specific government order, with a whole skein of interlocking laws. The former is for individuals anywhere and everywhere, in whatever condition, to know what is next, what comes after death, what God wants.

A great Christian error is to believe that the Law of Moses had anything to do with salvation. It didn't. God never promised the Jews that if they kept the law, they would go to heaven. There is no promise of heaven in the Torah. The only thing God EVER promised under the Law of Moses was secure family life on a farm in Israel. God never promised Gentiles anything at all.

So, it is quite inaccurate to believe that one can EITHER follow the whole Jewish law OR follow Christ - that if one COULD follow the whole Jewish law, one would be acceptable for Heaven. God never, ever said that. It's a common mistake Christians have made since the first Christians, who were Jews. It's a natural mistake, especially for the early Jewish Christian, but it isn't what God said.

If you want to go to "Heaven", you have to do what Jesus said. If you were a Jew and wanted to keep your farm in Israel and not have Israel destroyed, you all had to follow the Law of Moses.

The PURPOSE of the two laws is different. Because with Israel, GOd actually ruled every facet of a country, and he did not give the Hebrews any legislature or council or ability to create any new laws or change any old ones (he even gave the judges the judgments they were to judge, based on the case type), his laws get into the weeds of every aspect of life. Jesus speaks at a much higher and more general level.

Where Christians will start to fight is a two pronged arugment: the Mosaic law doesn't matter and is just ceremonial...when they don't want to do it...but it's moral and applies to everyone...when they want to impose it. Both positions are wrong. Truth is, for Gentiles, the law is COMPLETELY INAPPLICABLE, and ALWAYS was, even before Jesus.

BUT, even though the Law of Moses is not, and never ever was law for Gentiles, it's still very instructive, because it shows how God Himself thinks regarding social imbalances and justice, and how God dealt with the problems. We cannot rightly just point to the Law of Moses and say "It's in the Bible, so it binds us all!" because the Bible ITSELF says that is completely false. But we SHOULD read very carefully God's design for ancient Israel's government, because he had to face the same problems that any human governor faces, and his judgment on how to align the different elements has the virtue of perfect foresight and divine intelligence behind it.

Still, the process itself, of going through all of the interlocked and overlapping parts of the Law of Moses, is time consuming. Since you followed up on the thread, I know you're waiting to see the next installment, so I'll go ahead and work on it in earnest again, to get it posted.

Vicomte13  posted on  2016-05-03   14:08:27 ET  Reply   Trace   Private Reply  


#9. To: Vicomte13 (#8)

Since you followed up on the thread, I know you're waiting to see the next installment, so I'll go ahead and work on it in earnest again, to get it posted.

Thanks!

A government strong enough to impose your standards is strong enough to ban them.

ConservingFreedom  posted on  2016-05-03   14:18:36 ET  Reply   Trace   Private Reply  


TopPage UpFull ThreadPage DownBottom/Latest

[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

Please report web page problems, questions and comments to webmaster@libertysflame.com