Thursday, September 24, 2009

Redefining Recovery: Wealth creation is not the problem, Poverty creation is.

Whether we would save Wall Street, Main Street, the industrial mile, the platinum mile, trailer parks, soccer parks, green belts or Park place, seems now to be a fight over wealth not yet generated, a scratching, cutting, blood-letting fight for survival. The competition for a share is like a dog fight, with teeth bared, flashing and slashing, and the choice is made for no reason better than “meaner is more deserving”. Those who have want to keep, those that have none want to get, and the argument serves no purpose greater than personal survival. In the language of economics, the justification is made in terms of jobs, protecting wealth, keeping the systems of the economy working. But does any one really know what this re-distributed wealth is supposed to accomplish, and whether it will do any good? I will offer my vision.

A friend said to me, “We need a new kind of fuel for our cars.”. I laughed out loud. “We NEED” I said, “clean water, shelter and food. We WANT cars and fuel for them.” Don't let me confuse you, I am not proposing to send everyone to the farm. But let us be clear about priorities. The driving force of any economy is the appetite for food, shelter, safety, health care, and clean water, the needs that get people to work and produce. If the economy fails to produce these things, people will be insecure and will not participate. If the economy does not produce these things, the people will find other ways to meet these needs, by stealth, theft or violence, if need be. If the people cannot meet these needs, they will suffer, rebel, get sick, self-medicate, or die. If the people who do the work cannot get their needs met, they cannot work, and the economy cannot flourish. The first priority of any economy must be to meet these essential needs.

If you are Hugo Chavez, you do this with oil wealth, by buying what your people need from other more productive economies. Not a sustainable solution.

If you are wise, you do this by planning investment into infrastructure that helps ordinary people to survive. For example, since clean water is a public good, you use some of the productivity of the economy to build treatment facilities. Since affordable housing is a public good, you configure property laws and taxes to favor ownership of an only home, to reduce pressure on property values. Since poverty is the failure to get needs met, you use some of the productivity of the economy to provide jobs to people who cannot otherwise find work, and you put them to doing things we need to do anyway, such as maintaining parks. The work contributes to the community, the worker has the stability of an income, the worker has pride in him or her self, and the local economy benefits from the money spent by this employed person whose previous income may have come partly from public dollars anyway.

As a mechanism for meeting the human hierarchy of needs, our economy has been upside down. By favoring wealth accumulation with low taxes, wealth has gone to those already possessing it, and has allowed those with the fewest resources with no means to acquire any. Those who have, in our system, have gotten more and more, while those with the least just keep losing, suffering more and more. The problem, as I see it, is not that anyone is wealthy, but that any one might have so little of what they need that they cannot pull themselves up out of poverty. The problem, as I see it, is not that anyone has more than they need, it is that anyone has less than they need.

Although many people distrust the government, and dislike that anyone would be dependent upon it, and most people prefer the dignity of being paid for their personal productivity, the market by itself follows wealth, minimizing employment, often leaving well educated and responsible people without work or access to a minimum income. Furthermore, the market place follows wealth for private gain, making it unable, because of conflicts of interest and the absence of profit, to provide a whole class of services which are essential to the community, and even to the functioning of the market place.

“The government”, on the other hand, is the institutional realization of “community”, where the general and common goods have their voice and can bind on the productivity of the community, for their support. “The government”, we could say, is the only “business” in which everyone is a subscriber, and in which everyone has one vote. The Government is the only “business” whose “product” is paid for by those who can afford to pay, and received by all who need. The Government is the only “business” whose “product” is safety, clean water, roads, health care, community planning, education, and the power to set the rules of behavior and the power to force other businesses and people to follow those rules. The government is the one “business” to which people who are powerless can go for help and consideration, because other businesses – private interests - are uninterested. The government is the seat of the public interest which creates the environment for business and the market place to flourish in safety and with confidence in the supply of money, people and materials. The government is the seat of the public interest, with responsibility to everyone, with the responsibility to ensure that the basic structures of self-care are deployed. The government is where the appropriate private interest in wealth creation can be counterbalanced by a vision of common well-being. “The government” is the one source of sufficient power and authority to counterbalance greed and crime.

While the market provides opportunities to get wealthy, the government, as the sole guarantor of the public good, is the sole agent which can ensure that people have opportunities just to survive. This standard is very different from our custom, but provides ample room for driven motivated people to rise above the minimum. As a poor citizen, I do not expect any one to make my life comfortable beyond the provision of essential services, and for these I expect to work. But I need them to be there, at a price I can afford, and the opportunity to work for them.

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