The Reformed Tradition, and the
Transformation of culture.
Reflections
Consecration
of culture: In the
matter of Christianity and culture in a conflict, God does not want either of
them to be destroyed, because culture is also important in our societies. But
everything we do must not be against God’s standards. Our works should be
consecrated to the service of our God. The Bible says, “Do not be conformed to
this world, but be transformed by renewal of your mind, that by testing you may
discern what is the will of God, what is good and acceptable and perfect…
Romans 12:2. God’s truth does not vary from culture to culture or from age to
age. All Scriptural and moral truth is contained in God’s Written word. Jesus
says that God’s Word will sanctify us or set us apart from the world for God’s
purpose John 17:13 ….
The
Separateness of the Culture: According to Matthew 5:13, “You are like salt for the
whole human race. But if salt loses its saltiness, there is no way to make it
salty again. It has become worthless, so it is thrown out and people trample on
it. In these words, our Lord established at the very beginning the distinctness
and separateness of the Church. If the sharp distinction is over broken down
between the Church and the world, then the power of the Church is gone. The
Church then becomes like salt that has lost its savor, and is fit only to be
cast out and to be trodden under foot of men.
The Church against culture: J. Gresham Machen believed that
culture (understood in the sense of high culture) was extremely important. The
categories that one received from one’s culture either enabled or disabled the
understanding of biblical Christianity. Consequently, culture was far too vital
simply to be ignored, and it could not be destroyed without doing injustice to
our humanity. The Church is puzzled by the world’s indifference.
The Modern Predicament: God is not a name for the totality of things, but an
awful, mysterious, holy person, not a “Present God” in the modern sense, not a
God who is with us by necessity, and has nothing to offer us but what we have
already, but a God who from heaven of His awful holiness has of His own free
grace had pity on our bondage, and sent His Son to deliver us from present evil
world and receive us into the glorious freedom of communion with Himself.
The responsibility of the Church in our New Age: There are old things which ought
to remain in the new age; and many of the things both good and bad,
which the new age regards as new are really as old as the hills.
Old things worth retaining: In the former category are to be put, for example,
the literary and artistic achievements of past generations. Those are things
which the new age can produce something to put in their place, and that it has
so far signally failed to do. On the other hand, the responsibility of the
Church in the new age, then, according to J. Gresham Machen, was the same as
its responsibility in every age.
Calvinism
and Politics.
Reflections
John Calvin
and Abraham Kuyper. Both of these men have shaped history and theology in
important ways. Calvin’s work impacts a variety of topics: Politics, Science,
art, and religion. His insights also include God’s sovereignty in the world,
God-ordained spheres of authority, and God’s election of his people.
Kuyper knew
his own time well, and he had a great eye for what was to come. Learning from
Kuyper offers us a chance to get a better picture of our world and how we can
work to bring the gospel to coming generations. Abraham Kuyper was understood.
He went on to study philosophy, theology, and literature at the university
level. He was also a minister in the Dutch Reformed church, but he saw
corruption there and led a reforming movement. This movement encouraged a
clearer separation of church and state. Jesus is king, and he is ruling over
everything, and there is nothing that escapes his judging eye and his
jurisdiction.
Kuyper saw
John Cavin’s work as teaching and applying what the Bible taught about the
gospel. The gospel impacts everything. It impacts our relationship with God,
our relationship with man, and our relationship with the world. At every moment
of our existence, our entire spiritual life rests in God Himself. God has
established authorities in the world and that God has ordained them to maintain
good order.
These
authorities include: governments, family, and state. These three operate on the
foundation of self-government, which requires that each man must submit
directly to Jesus’ Lordship. The family is set apart to rule over the needs
surrounding reproduction, food, clothing, shelter, and education. The church is
set apart to rule over the spiritual needs of teaching and preaching the word
of God and administering the sacraments. The state is set apart to defend its
people and punish evil.
There is
Calvinism’s strength to transcend state boundaries and move freely into various
lands and people. This happens because Calvinism emphasizes the work of the
gospel starting at that level of human heart. From there, it works its way out
into all of society. The Church of Christ is not national but ecumenical.
Conclusion: If the world is masterpiece of our
heavenly father, then we must explore it in order to know him better. The
secular worldview is a full-orbed attack in order to push back rightly on this
attack, Christians must have a full-orbed worldview that is ready to cover any
and all topics from a biblical foundation.
Meltdown 1 & 2. Reflections
Concerning our economic problems, many Americans ere looking
for the new Administration to solve the new economic problems. Unfortunately,
that is probably a vain hope. Although we were promised “change,” we are likely
to get a continuation of the same superficial economic fixes that have changed
so many economies in the past, and that will only delay the return of
prosperity. The fixes are based on the false belief that the free-market
economy has failed. The Federal Reserve and its manipulation of money and
interest rates have failed. None of these can be blamed on the free-market, but
that is not stopping news paper columnists from doing so anyway.
Keynesian so-called economists, led by Paul Krugman, are
vainly reaching into their usual bag of tricks to try to solve intervention
with more intervention, and nothing is working. But they are persistent. They
will keep scrounging around in that bag all throughout the Obama
administration. The slump will continue, since none of these tricks has the
slightest thing to do with the underlying problems in the economy. And there
are still a lot of unpayable debts. Meanwhile, who is being ignored during this
crisis? The free-market economists of the Austrian School of Economic thought,
the very people who predicted not only the Great Depression, but also the Calamity
we are dealing with today. The good news is that Austrian School economists are
gaining more acceptance every day, and have greater chance of influencing our
future than they have had for a long time. Woods elegantly discovers in the
tradition of Austrian School of Economics of Ludwig von Mises and Friedrich von
Hayek (Nobel Laureate, 1974), that the main culprit for the creation of crises
or as economists explain the boom bust cycle – is the monetary system’s nature.
As he goes, it is a system that allows a process of artificially expanded money
supply which necessarily ends in a general increase in the level prices
inflation which erodes the purchasing power of people’s money. Who actually
allows this process is, as the author states, the institution that has a
monopoly power on money production and setting interest rates, namely the central
bank. This institution puts in practice a functional reserve banking system
which is enforced to all the commercial banks in the market. Functional reserve
means that private banks are forced to keep in their reserves only a part or a
fraction of the money they borrow. This means that they can lend more than they
received in cash, which technically makes them inherently bankrupt. By its
monopoly right and having at disposition taxpayer money, central bank can
always intervene and save or bailout these bankrupt banks. Moreover, by in
institutionalizing this banking behavior it creates a phenomenon of mural
hazard as “the increased likelihood of risky behavior when the acting party
believes that any costs of his behavior will be born not by himself alone but
by a large pool of people – as when a firm behaves recklessly because it
expects to be bailed out with other people’s resources.
Since the fall of 2008, as the stock market plummeted,
companies folded, and economic fear and uncertainty began to spread, Americans
have been bombarded with a predictable and relentless refrain: the free-market
economy has failed. The remedy? According to Barack Obam, the late Bush Administration,
Republicans and Democrats in Congress, and the mainstream media, it’s more regulation,
more government intervention, more spending, more money creation, and more
debt. To add insult to injury, the people who advised the policies that
produced the mess are now posing as the wise public servants who will show us
the way out. Following the familiar pattern, government failure has been blamed
on anyone and everyone but the government itself. And of course, that same
government failure is being used to justify further increases in government
power.
Monetary History.
Reflections
The sponsor
of the successful gold commission amendment was congressman Ron Paul of Texas.
He is one of the leaders of the effort to establish a redeemable gold dollar
and will serve on the commission along with public and private sector
representatives. In the effort to clarify the issues involved and add some
historical insights the current debate, Congressman Paul has written a booklet
that is clear, elemental, enlightening. As he demonstrates, “The consequences
of monetary destruction are complex, but the solution is not.”
Congressman
Paul outlines the steps that must be taken to move from a government fiat money
system which is handed toward disaster, to a system of honest, free market
money. He also refutes some of the commonly raised objections to a gold
standard. One such assertion is that there is not enough gold to return to a
100% redeemable – in – gold dollar. Dr. Paul quotes Professor Hans Sennholz:
“In a free -market economy it is utterly irrelevant what the total stock of
money should be. Any given quantity renders the full services and yields the
maximum utility of a medium of exchange. It so obvious and yet so obscured by
specious reasoning of special interest Spokesmen that the painting of another
ton of paper money does not create new wealth.” Inflation is an increase in the
quantity of money. It is legalized theft by means similar to counterfeiting. A
small increase in the quantity of money, even if intended to just match the
increase in productivity or the economic growth rate “inevitably introduces
malinvestment as those getting the new money put it to uses that only later
recessions show to have been unproductive.” Free market competition in money
gives the people, not the politicians, power over the monetary system. It is “a
free people’s ultimate protection from spendthrift and untrustworthy
government.”
“The road to
monetary destruction has been long and circuitous, but we are coming to the end
of it. Sixty-seven years of central banking have brought us to the edge of
depression and hyperinflation. However, the alternative to today’s monetary
fraud and tomorrow’s chaos is readily available to us. The spirit of freedom,
and the desire for honest money, still run strongly among our people.”
Conclusion
History
provides many examples of governments of all types destroying the monetary unit
through uncontrolled inflation. History teaches that the only means yet
discovered to harness the natural tendency of government to debase the currency
is a monetary system which is backed by a commodity. Over the centuries,
countless societies have selected gold as that commodity. However, the
particular commodity chosen of little importance provide the decision is the
result of an unhampered market process.
Human
Action.
Reflections
In the foreword to Human Action: A Treatise on Economics,
Mises explains complex market phenomena as “the outcomes of countless
conscious, purposive actions, choices, and preferences of individuals each of
whom was trying as best as he or she could under the circumstances to attain
various wants and ends and to avoid undesired consequences.” It’s individual
choices in response to personal subjective value judgements that ultimately
determine market phenomena – supply and demand, prices, the pattern of
production, and even profits and losses. Although governments may presume to
set “prices,” it is individuals who, by their actions and choices through
competitive bidding for money, products, and services, actually determine
“prices”.
Thus, Mises presents economics – not as a study of material
goods, services, and products – but as a study of human actions. He sees the
science of human actions, praxeology, as a science of reason and logic, which
recognizes a regularity in the sequence and interrelationships among market
phenomena. Mises defends the methodology of praxeology against the criticism of
Marxists, Socialists, positivists, and Mathematical Statisticians. Human
Action: A Treatise on economics attributes the tremendous technological
progress and the consequent increase in wealth and general welfare in the last
two centuries to the production of liberal government policies based on
free-market economic and political environment which permits individuals to
pursue their respective goals in freedom and peace. Mises also explains the
futility and counter productiveness of government attempt to regulate control,
and equalize all people’s circumstances: “Men are born unequal … it is precisely
their inequality that generates social cooperation and civilization.”
All human action involves choice. The principle of choice re
universal and are valid for every human action without regard to underlying
motives, causes and goals. Economics is a science of human action. This are the
basic presuppositions of Von Mises’ treatise. In equating economics with the
theory of choice and preference, the author transcends the scope of classical
economics. To the classicists -economics was an autonomous and self-sufficient science.
To Von Mises, economics is part of the larger science which is called praxeology,
that is, the science of human action. Traditional “economic man” calculated his
action to get maximum of gain, minimum of cost. To Von Mises, economic behavior
involves the calculation of all kinds of satisfactions, moral and aesthetic,
the ideal and the base. The classicists drew the boundary line between economic
and noneconomic as two inseparable phases of human life and action. The classical economists subordinated human
action generally. For the classicists (and the socialists and institutionalists)
value precedes price; for Von Mises (and the marginalists) price precedes
value.
The function of science in the view of the author is truth,
not utility. The purpose of science is not application but insight into human
motive. Hence economics is a formal science. Its theorems have no imperial
content. Its propositions do not derive their validity from empirical
observation. The ultimate yardstick of the correctness of economics theory is
“solely reason unaided by experience, means and ends. Economics theory is in
dependent of economic practice. The former is superior for it is stable and
secure; the latter unstable and fleeting.
Bureaucracy 1 & 2.
Reflections
The decision
of the American people will determine the outcome of the whole of mankind. The
problem involved in the antagonism between Socialism and Capitalism can be
attacked from various view-points. At present it seems as if an investigation
the expansion of bureaucratic agencies is the most expedient avenue of
approach. An analysis of bureaucratism offers an excellent opportunity to
recognize the fundamental problems of the controversy.
Although the
evolution of bureaucratism has been rapid in these last years, American is
still compared with the rest of the world, only superficially afflicted. It
shows only a few of the characteristic futures of bureaucratic management. A scrutiny
of bureaucratism in this country would be incomplete therefore if it did not
deal with some aspects and results of the movement which become visible only in
countries with an older bureaucratic tradition. Such a study must analyze the
experiences of classical countries of bureaucratism – France, Germany, and
Russia.
There are
two methods for the conduct of affairs within the frame of human society, i.e.,
peaceful cooperation among men. One is bureaucratic management, while the other
is profit management. It is well known that profit management is highly
unpopular in our age. People are anxious to substitute all-round planning by a
central authority – i.e., Socialism – for the supremacy of the consumers as
operative in the market economy. But at the same time the same people severely
blame the shortcomings of bureaucratism. They do not see that in clamoring for
the suppression of profit management they themselves are asking for more and
more bureaucracy, even for full bureaucratization of every sphere of human
affairs.
There are
areas of man’s activities in which there cannot be any question of profit
management and where bureaucratic management must prevail. A police department
cannot be operated according to the methods resorted to in the conduct of a
gainful enterprise. A bakery serves a definite number of people – its customers
– in selling them piecemeal what it has produced; it is the patronage of its
customers that provides the social legitimacy – the profitability – of the
bakery’s business. A police department cannot sell its “products”; its
achievements, however valuable, even indispensable as they may be, have no
price on the market and therefore cannot be contrasted with the total
expenditure made in the endeavors to bring them about.
Conclusion
This
reflection essay does not condemn or blame bureaucracy. It tries to point out
what bureaucratic management of affairs means and in what it differs from
profit management. It further shows in which field bureaucratic management is
the only possible method for the conduct of affairs in our societies.
Economic
Policy 1 & 2.
Reflections
In the 1970s, Murray Rothbard once criticized Milton
Friedman for advocating “indexation” of prices and wages as a method to reduce
some of the negative effects from an ongoing inflation. But in 1922, during the
worsening Great Austria inflation, Mises actually proposed “indexation” of
wages and prices, as well as government revenues and expenditures to reduce
deficit fiscal pressures, maintain real standards of living for many in the
society, and eliminate some of the inflationary distortions on economic
calculation – as a part of a specific policy agenda to bring the inflation to
an end. And he explained how the indexation should be implemented and linked to
the international value of gold.
Likewise, Mises did not just say, “Cut bureaucracy and its
spider’s web of regulatory control.” He first explained what was inefficient
and unnecessary in the three – tired Austrian bureaucratic system of federal
provincial, and municipal regulators and taxing authorities. Then he proposed
what specific reforms should be introduced, how they could be “experimented”
with some of the smaller regions of Austria to see how the worked before
extending them to the rest of the country, and how best to overcome the
resistance of those in the bureaucracy fearful of losing their jobs.
In designing a new fiscal order for Austria in the Post –
World War II era, Mises proposed eliminating all income taxes and many – but
not all – corporate and business taxes. But how, then, do you finance the costs
of government? He presents an agenda for implementing indirect taxes on a wide
variety of consumption items, and specially what today would be called “sin taxes”
and luxury taxes.” Government Welfare – state expenditures were not going to
just disappear. So, employers would be taxed to cover existing social –
insurance expenditures.
But overall, his fiscal policy plan for a reconstructed and
reformed Austria was all meant to foster capital formation through
predominately consumption taxation to cover government expenditures. An in a
lengthy monograph that he wrote during the Second World War devoted to economic
reform in an underdeveloped country like Mexico, he took as “given” that the
politics of Mexican society was not ready to fully privatize, say the national
railway system or the oil industry.
So as a “second best,” Mises proposed transforming the
railway system into a government – owned but privately managed corporation with
strict rules and procedures to assure it was run in a relatively “business –
like” manner with the least likelihood of political interference. He even
supported limited and temporary subsidies to assist poor Mexican farmers to
establish themselves as more successful private enterprisers.
And on tariffs, he did not propose immediate abolition of
trade barriers in Mexico. He accepted that there were many industries that had
grown up behind the tariff walls, and that they would resist immediate repeal
of trade protectionism.
So instead, he advocated “incrementalism,” i.e., a gradual
reduction of tariff barriers over several years. He even supported the use of
limited “trade retaliation” against countries that have raised their import
taxes against the goods of one’s own nation; this was meant as a means of
nudging that trading partner back to a freer trade policy, but without moving
in the direction of any form of trade protectionism.
Anti-Capitalistic Mentality 1 &
2.
Reflections
The wake of a natural disaster is a tumultuous setting.
Resources are scarce, actions are quick, and emotions are high. Social
commentators have often brought complaints against capitalism for promoting greed
and selfishness during and after catastrophes. Most recently academics have
introduced a unique perspective in addition to the more traditional criticisms.
They claim that free-market advocates have imposed capitalists’ theories and
polices in the wake of crises to the detriment of traditional polices,
preferred cultures, and democratically selected institutions. It is argued that
the left overlooks the case that capitalism and corporate business may be a
natural part of local cultures and recovery process.
Capitalism was blamed for producing poverty, price gouging,
displacing culture, biasing the dole of political resources and exaggerating
social ills of all sorts. Several socialist’s news outlets put forth the boldest
claims that the hardships were explicitly part and parcel of capitalist
economy. The characteristic future of modern capitalism is masses. The result
is a tendency towards continuous improvement in the average standard of living,
a progressing enrichment of the many. The adaptive character of capitalism and
free association is not a recent plan by economists to reshape society, instead
it is a spontaneous outcome of free individuals acting purposefully in response
to the harsh conditions of a crisis. The implication is that corporate interests
must be removed from the political process in order to preserve and protect a
purer and more equitable form of politics. On the other hand, free-market
advocates, wish to remove politics from the sphere of markets.
Unfortunately, the character of “free-markets” painted by
its critics is not a society where private individuals cooperate and innovate new
discoveries to serve flood protection needs. It is instead a political world
where major corporations bilk the public coffers to gain profit and privilege
over the citizens. These are two significantly different visions whose
differences are un-accounted for within the current literatures. Selling goods and
services after a hurricane have long been areas for normative complaints
against free market. With high demand for capital and physical resources,
prices and profit opportunities increase in the wake of disasters. Commentators
fail to recognize the important role that price increase serve to signal
suppliers and attract needed devastated areas quickly and efficiently. Instead,
they complain that escalated prices are unfair exploitation over victims of
circumstances.
Conclusion
The nominative claims against capitalism and market
processes in the wake of natural disasters are often overstated. New
perspectives that explain and theorize particular procedural orderings of
crisis and response fail to recognize the beneficial aspects of market-based
incentives to mitigate the effects of natural disasters before they happen, to
alleviate their effects after they occur, to facilitate quick and reliable
rebuilding. Capitalism and market processes are robust and resilient mechanisms
at the task of distributing goods and services throughout society including the
goods and services of rebuilding after a disaster. In many ways these
mechanisms are un-replicable by central planning or government services.
Finally, markets should be recognized as part and parcel of people’s cultures
and local identities because it is people who make up the market.
Church and the
market.
Reflections
Thomas Woods here addresses a question that many of his
readers will find of vital personal concern, but even those who need not
confront this question directly have much to gain from his analysis of it. He
rejects the need for government intervention to correct the supposed excesses
of the free market. In the support of this view, Woods relies principally upon
Austrian economics, of which he himself is a gifted expositor. Leo and his
successors endorse the right of private property and denounce socialism, they
also support “living” wage and, to that end, regard with favor the economic
effects of labor unions. Woods has an ingenious response. The papacy does
indeed have final authority on questions of faith and morals, but this
jurisdiction does not extend the economic theory and history. When Leo tells
us, e.g., that employers ought to pay a “living wage” that enables a man fully
to support a family, he implicitly rejects a conclusion of Austrian economics.
The Pope assumes that wage rates are set at the direction of the employer. If
the employer pays less than a living wage, he stands subject to ethical
judgment.
The assumption is false. In a free market, workers earn the
value of what they contribute to the product – in technical language, their
“marginal value product,” discounted for time. Employers who pay less than this
will lose their workers to firms that find it profitable to offer better rates.
An employer will not pay more than the discounted marginal product because this
is all the employer’s labor is worth to him. What then happens when the law or
labor union coercion compels employers to raise wages higher than the market
rate? Unemployment results: workers whose marginal value products fall below
the higher rates will be discharged, or not hired in the first place.
Obviously, Woods maintains the Pope cannot have been aware
of these ill effects when he recommended the living wage: he relied in his
encyclical on faulty economic theory. To differ with Pope, then, does not
require the Catholic defender of the free market to question the Pope’s moral
authority: he needs only deny that the Pope’s judgments about economic theory
have binding force. In like fashion, believers stand free to make their own
evaluations of secular history. The Industrial Revolution, however the Vatican may
view it, was a blessing rather than a curse to the European masses.
Conclusion
The response to this difficulty raises a fundamental issue.
Austrian economics makes no judgments about ethics. If an economist argues, in
the fashion just explained, that minimum wage laws cause unemployment, he has
made a purely factual assertion: “Father James Sadowsky., … expressed it well
when he said that ethics is prescriptive. ‘Economics,’ he says ‘indicates the
probable effects of certain polices, while ethics determines what one should
do. These are two different things”. But given certain truths of economics,
ethical judgments at once suggest themselves to the moral mind. Someone, e.g.,
who accepts the Austrian view of effects of mandatory minimum wages will be
unlikely to be a committed advocate of this measure.[1]
Socialism: An Economic and
Sociological Analysis.
Reflections
Relating to
Socialism, Mises, von Ludwig, say “The world is split today into hostile camps,
fighting each other with the utmost vehemence, communists and anti-communists.
The magniloquent rhetoric to which these factions’ resort in their feud
obscures the fact that the both perfectly agree in the ultimate end of their
program for mankind’s social and economic organization. They both aim at the
abolition of private enterprise and private ownership of the means of
production and at the establishment of socialism. They want to substitute
totalitarian government control for the market economy. No longer should
individuals by their buying determine what is to be produced in what quantity
and quality. Henceforth the government’s unique plan alone should settle all
these matters. ‘Paternal’ care of the ‘Welfare State’ will reduce all people to
the status of bonded workers bound to comply, without asking questions, with
the orders issued by the planning authority.
Neither is
there any substantial difference between the intentions of the self-styled
‘Progressives’ and those of the Italian Fascists and the German Nazis. The
Fascists and the Nazis were no less eager to establish all-round regimentation
of all economic activities than those governments and parties which
flamboyantly advertise their ant-Fascist tenets. And Mr. Peron in Argentina
tries to enforce a scheme which is a replica of the new Deal and the Fair Deal
and like these will, if not stopped in time, result in full socialism.
The great
ideological conflict our age must not be confused with the natural rivalries
among the various totalitarian movements. The real issue is not who should run
the totalitarian apparatus. The real problem is whether or not socialism should
supplant the market economy. Mises disagrees with socialism due to its economic
incoherence but more fundamentally ethically. No rights are granted by nature:
there is no natural law or social contract. Instead, life necessitates economic
action which, in turn, requires peace.
Socialism’s
claim to abolish the ownership of the goods is, according Mises, impossible. To
own something is to have it in possession and to be able to use or employ it.
With consumption goods, this is necessarily an individual activity.
Conclusion
World
conditions have changed considerably. But all these disastrous wars and
revolutions, heinous mass murders and frightful catastrophes have not affected
the main issue: the desperate struggle of lovers of freedom, prosperity and
civilization against the rising tide of totalitarian barbarism.[2]
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