international trade

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For Example (Wendell Berry on our economy’s effect in human communities)

Last time I remarked that Wendell Berry’s agrarian philosophy is congruent with the Trump administration’s re-focus of economy here in America. For example –

“…The attitudes of the industrial economy…” writes Wendell Berry, “have taken their toll…. the news from everywhere in rural America… bankruptcy, foreclosure, depression, suicide, the departure of the young, the loneliness of the old, soil loss, soil degradation, chemical pollution, the loss of genetic and specific diversity, the extinction or threatened extinction of species, the depletion of aquifers, stream degradation, the loss of wilderness, strip mining, clear-cutting, population loss, the loss of supporting economies, the death of towns. Rural American communities, economies, and ways of life that in 1945 were thriving and, though imperfect, full of promise for an authentic human settlement of our land are now as effectively destroyed as the Jewish communities of Poland….

The news of rural decline and devastation has been accompanied, to be sure, by a chorus of professional, institutional, and governmental optimists, who continue to insist that all is well, that we are making things worse only as a way of making things better, that farmers who failed are merely ‘inefficient producers’ for whose failure the country is better off, that money and technology will fill the gaps, that government will fill the gaps, that science will soon free us from our regrettable dependence on the soil.  ….We have heard that the rural economy can be repaired by moving the urban economy out into the country and by replacing rural work with work in factories and offices. And all the while the real conditions of the rural land and rural people have been getting worse.

Port Royal, Kentucky… (was once) held together by a complex local economy…. sixteen businesses and professional enterprises… all serving the town and the surrounding farms. …Now, counting the post office, the town has five enterprises, one of which does not serve the local economy. There is now no market for farm produce in the town or within forty miles. We no longer have a garage or repair shop of any kind.  We have had no doctor for forty years and no school for thirty.

What does the death of a community, a local community, cost its members? And what does it cost the country? So far as I know, we have no economists interested in such matters. ….as the urban-industrial economy more and more usurps the local economy…. my part of rural America is, in short, a colony…. in the power of an absentee economy, once national and now increasingly international, that is without limit in its greed and without mercy in its exploitation of land and people.” (‘Conservation and Local Economy’ (1992) in The Art of the Common Place: The Agrarian Essays of Wendell Berry.)

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Donald Trump, Wendel Berry, and International Development theory all in agreement

One of the ironies of the present moment (and there are many) is that while the media pundits declare that President Trump’s ‘isolationism’ (in prioritizing the American economy and withdrawing from international trading not to America’s advantage), is economic suicide, bad global citizenship, and regressive… he actually advocates what both current international development theory recommends to developing nations, and what agrarian philosopher/farmer/poet/economic thinker Wendell Berry advocates for rural American towns.

International development theory currently contends, due to decades of observation, that the promise of benefits from hooking up to the global economy are not panning out for developing nations. Relatively few people are benefiting, and most of them are banks and corporations in the developed world. Instead, development theorists contend, developing nations should look inward, develop a diversified economy that meets the needs of their own populations. In other words, don’t base your economy on Americans buying bananas or T-shirts (while you have to import everything else) – the price of bananas in the U.S. may drop five cents per pound and wipe out your economy, or Vietnam may start making T-shirts cheaper than you, equally wiping out all the eggs you placed in one basket. Make things in your own country that people in your own country need, thus creating jobs and economic linkages both vertically and horizontally along the economic spectrum. This has been a radical re-think in the development industry, a painful moment of repentance. What Trump is advocating for the U.S. is exactly what development theorists advise developing nations to do. Don’t expect many people in our megalopolis or Ivy League schools to admit this though.

Wendell Berry, as well, advocates the same thing for small rural American towns. Throughout his writings he bemoans the loss of local economies and economic linkages to transnational, absentee corporations who rape local economies in all the ways we learned during the era of colonialism against the indigenous peoples of the world. Berry points out that small towns used to be loci of production, horizontal linkages (blacksmiths, tack shops farmers needed, etc) and now there are neither jobs nor those horizontal-linkage businesses. These absentee corporations care neither for the people nor the place where their goods are made or bought, and local conditions testify to the fact – including the contrast to what these places used to be like. The Art of the Common Place: The Agrarian Essays of Wendell Berry is rife with this thought. Though the Trump administration’s policies on international trade are demonized as throw-back, ignorant hyper-nationalism, he is actually doing what both the international development industry is telling developing economies to do, as well as being congruent with the avant garde thought of our most famous agrarian philosopher alive.

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Poverty and Capitalism in SE Asia

I’ve been in our new location in SE Asia for the last week, driving around the city and nearby countryside. What I’ve been seeing has sparked thoughts about poverty, capitalism, free markets and international trade.

It’s clear that free market capitalism has benefitted industrious people here in absolutely huge numbers. There are beautiful – and not small by U.S. standards – homes everywhere; very very nice homes, inhabited by people whose parents lived in shacks a generation ago. The ability to start a business from the ground up (selling vegetables or plastic household goods, for instance, along the roadside to the burgeoning population), and then develop that business into a successful wealth-generating income, stands as a classic example of why people argue for free market capitalism. The evidence is all around me. As I stand on my balcony looking across the neighborhood in the morning, the homes are beautiful, incredible. And I do not live in a wealthy area… this is considered middle class. In a local setting, “the invisible hand” can provide a context for a lot of good.

At the same time, if you know about the Toronto debacle regarding the hire-local, produce-local solar panel scheme, it’s clear that in terms of international trade, “the free market” is a laughable myth, an insult to thinking people. The WTO successfully sued Toronto, declaring that a city cannot prefer local goods over foreign goods. Essentially this simply makes sure the Donald Trumps and other transnational corporate empires are free to dominate every single market, and a local community cannot make choices about its own labor and industry at all. There isn’t anything free or invisible about what happened in Toronto, it’s clear the market is stacked, channeled, constrained and controlled by mega-size forces who get laws written to protect their ability to accumulate more fortunes. I don’t begrudge Trump his wealth; I detest the idea that we act so ridiculous as to say that “free markets” and “an invisible hand” are enshrined values in international business. Nothing could be further from the truth.

The tax code and other tools have always channeled markets when governments got involved, and let’s not act like we are protecting freedom for the little guy, when we are actually protecting transnational giants who dominate the world in breathtaking ways rarely seen in human history.

So, two thoughts: 1) a free market can be a very valuable help to a local population. 2) What’s going on in international trade law is the furthest thing from a free market.

Next time I’d like to share some thoughts about what is poor and what is not.

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Schumacher: the limitations of economics to reflect reality

“I’ll post it in a few days.” A few days! I am having trouble getting back to my blog as I am being subsumed under a wave of a zillion things to do as I wrap up my job pastoring a fantastic church in rural Pennsylvania, at the same time that I have another zillion things to do preparing for a move to SE Asia.

In any event, here is E.F. Schumacher’s quote, written in 1973, regarding the short-sightedness of modern economic activity: (Well, I think this is the one I had in mind 10 days ago!)

“Economics, moreover, deals with goods in accordance with their market value and not in accordance with what they really are. The same rules and criteria are applied to primary goods, which man has to win from nature, and secondary goods, which presuppose the existence of primary goods and are manufactured from them. All goods are treated the same, because the point of view is fundamentally that of profit-making, and this means that it is inherent in the methodology of economics to ignore man’s dependence on the natural world. (Note from Todd: you can monetize wood, but when there’s no forest left, money does not equal trees anymore).

Another way of stating this is to say that economics deals with goods and services from the point of view of the market, where willing buyer meets willing seller. The buyer is essentially a bargain hunter; he is not concerned with the origin of the goods or the conditions under which they have been produced. His sole concern is to obtain the best value for his money.

The market therefore represents only the surface of society and its significance relates to the momentary situation as it exists there and then. There is no probing into the depths of things, into the natural or social facts that lie behind them. In a sense, the market is the institutionalization of individualism and non-responsibility. Neither buyer nor seller is responsible for anything but himself.

….economists have felt entitled… to treat the entire framework within which economic activity takes place as a given, that is that is to say, as permanent and indestructible. It was no part of their job and, indeed, of their professional competence, to study the effects of economic activity upon the framework. Since there is now increasing evidence of environmental deterioration, particularly in living nature, the entire outlook and methodology of economics is being called into question. The study of economics is too narrow and too fragmentary to lead to valid insights…”

E.F. Schumacher, Small is Beautiful: Economics as if People Mattered (Harper & Row, 1973, pp. 46, 54).

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The irony of modern economics

One of the most amazing ironies of modern Western civilization is, to me, that a few hundred years ago, some economists convinced all Christendom that self-centeredness and greed were actually virtues rather than vices, and would benefit society! The idea, of course, was that if I pursue making my business succeed with all speed, (in order to make more money for myself), my competitors will be doing the same to keep up, and everyone will benefit by better products, more efficient processes, and an increased economic activity in society all around.

One of the things that could be observed was that the traditional Christian virtues were a bit better entrenched in society back then (John Wesley said work as hard as you can for your business to succeed, as long as it doesn’t hurt your neighbor’s business!), but more importantly, this self-centeredness as economic driving force is neither biblical nor good, in the long run, for the world. The theory is that enlightened self-interest will serve as a brake from anyone carrying their selfishness too far… as chopping down too many trees would cut into the sustainability of their bottom-line. However, history has shown that in a world of transnational corporations, this doesn’t actually work.

The modern economy runs almost exclusively on short-term profits, and short term profits erase all notions of long-term environmental sustainability. Humanity’s footprint in the natural world was a lot smaller 300 years ago. If a farmer farmed his land the way transnational corporations “manage” our environment, he’d be looking at a desert within five years. Good farmers know there is much about nurture rather than production that needs to be taken into account, if you want that land to make food for your grandchildren’s generation. In our world today, it is, most often, the people at the bottom of the economic ladder, the poorest of the poor, who bear the brunt of the environmental damage, because they have the least power and voice in the society to make a big deal out of it and apply pressure.

Schumacher makes this point about the dysfunction of classic Western economics in ‘Small is Beautiful:  Economics as if People Mattered.’ I will post his quote in a few days.

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I’m moving to SE Asia

So, I’m a bit late in posting, as some rapid developments in our lives here have resulted in something exciting and new: my family and I are moving at the end of the summer to SE Asia where we have accepted a position in our denomination. More on that in the future. In the meantime, I promised some more from E.F. Schumacher’s Small Is Beautiful: Economics As If People Mattered, from 1973. And here it is… Schumacher starts the book with the following two quotes:

“Few can contemplate without a sense of exhilaration the splendid achievements of practical energy and technical skill, which, from the latter part of the seventeenth century, were transforming the face of material civilization….

If, however, economic ambitions are good servants, they are bad masters.

The most obvious facts are the most easily forgotten. Both the existing economic order and too many of the projects advanced for reconstructing it break down through their neglect of the truism that, since even quite common men have souls, no increase in material wealth will compensate them for arrangements which insult their self-respect and impair their freedom. A reasonable estimate of economic organization must allow for the fact that, unless industry is to be paralyzed by recurrent revolts on the part of outraged human nature, it must satisfy criteria which are not purely economic. “

  • H. Tawney, Religion and the Rise of Capitalism

“By and large, our present problem is one of attitudes and implements. We are remodeling the Alhambra with a steam-shovel, and are proud of our yardage. We shall hardly relinquish the shovel, which after all has many good points, but we are in need of a gentler and more objective criteria for its successful use.”

  • Aldo Leopold, A Sand County Almanac