Saturday, October 27, 2012

Blue State Blues

Recently, Walter Russell Mead wrote the latest in his analyses of the crumbling “blue social model” that is dragging down any serious momentum for economic growth in the U. S. and Europe.  His focus was on President Obama’s home state of Illinois, where the Church of the All Powerful State (CAPS) reigns undisturbed by reality (although Rahm Emmanuel has shown signs of apostasy).

The Recovering Bureaucrat’s favorite journalist from the Land of Lincoln, John Kass, has been chronicling the disheartening details of how the feudal structure is propped up.  In his latest column for the Chicago Tribune, called “Change in Madiganistan Starts at Home,” Kass outlines how Speaker of the House Michael Madigan, high priest of the Illinois CAPS, controls the political apparatus that has bankrupted the state. 

This level of control could only happen in either a one-party state like California or a place, like Illinois and New York, where both parties are in on the deal.

Here in the once Golden State, the Republican Party slowly committed hara-kiri over the past twenty years, and now has become all but irrelevant to statewide decision-making.  With the erosion of our once dominant manufacturing base, the big business establishment is controlled by banking, Hollywood, and Silicon Valley—activities indifferent to, if not outright manifestations of, the parasitic impact of rent-seeking on wealth creation.

The Destructive Impact of Rent-Seeking

It’s essential to our civic responsibilities to be literate with political economic terms and dynamics.  “Rent-seeking” originally meant financial activities that of themselves generate no wealth but are entirely dependent upon actual wealth production for their existence.  Investopedia explains it thus: “When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.”
An example of rent-seeking is when a company lobbies the government for loan subsidies, grants or tariff protection. These activities don't create any benefit for society, they just redistribute resources from the taxpayers to the special-interest group.
Sandy Ikeda has a primer on rent-seeking on the Foundation for Economic Freedom’s website, The Freeman.
According to the principle of human action that Ludwig von Mises used as the starting point of economics, man acts in order to improve his situation as he sees it.  One of the important lessons taught by Mises, and later many of the adherents of the Public Choice school of political economy, who follow in the footsteps of Tullock and James Buchanan, is that while the principle of human action is universal, the particular actions chosen, and the consequences that follow from them, depend crucially on the “rules of the game.” 

Sunday, October 14, 2012

Clashing Narratives

Ed Driscoll at Instapundit recently linked to a fascinating election analysis by Robert James Bidinotto entitled “Election 2012 and the Clash of Narratives.”  It is a crisp summary of the ongoing clash that the Recovering Bureaucrat has been chronicling between supporters of the founding principles of the United States and the counterrevolution against it led by Church of the All Powerful State.

Bidinotto calls this a battle between two narratives: the progressive zero-sum Narrative and the Narrative of American Individualism.

His analysis of the origins of the progressive zero-sum Narrative is spot-on.  He correctly ascribes it as a product of the pre-industrial tribal social organization and consciousness that dominated human evolution from the rise of agriculture at the end of the last Ice Age through the European Renaissance and Reformation.
For progressivism is not a mature, adult philosophy, but a juvenile story—an immature, childish Narrative about how the market economy supposedly works.  More specifically, it is a primitive Narrative, one rooted far back in mankind's distant tribal past.  This timeless Narrative has been resurrected and propagated endlessly in classic myths, allegories, and parables, such as Robin Hood, the Sermon on the Mount, Dickens's A Christmas Carol, and Capra's It's a Wonderful Life.  It remains the central plotline of endless novels and films in which rapacious (more recently, carcinogenic) corporate tycoons crush the souls, jobs, and lives of hapless, hard-working "little people."  Arguably, it goes back to the Prometheus myth in ancient Greece: After all, Prometheus didn't create fire as his gift to man, but stole it from the gods (Zeus: "Prometheus, about that fire—you didn't build that!")
This period lasted for almost twelve thousand years, and this dug a deep groove in the collective consciousness of the human race.  And, truth be told, this perspective on life still predominates among the majority of people on the planet today. 
Now, it was understandable that our primitive ancestors would accept a zero-sum, tribal Narrative about wealth.  In their hunter-gatherer world, basic needs were filled mainly by scavenging from nature, not by producing goods. Facing myriad threats, vulnerable individuals grouped together in tribes as a matter of survival.  Threats also came from other tribes, which were competing for access to the same natural resources.  It was a brutal, zero-sum world of privation, of a limited "pie" of wealth—fostering an ethos of kill or be killed, eat or be eaten.
It was not until the Agricultural Revolution that men began to break free of the zero-sum existence of the hunter-gatherer lifestyle.  For the first time, production allowed men to increase the food supply—to expand the size of the "pie."  No longer did one person's gain entail another person's deprivation.  With the gradual increase of production under a division of labor, and with free trade among those producing specialized goods, the "pie" of wealth began to grow rapidly.  With the Scientific and Industrial Revolutions, living standards, which had remained at subsistence levels since the dawn of man's presence on Earth, suddenly began to soar, and so did life expectancy.