Despre dezastrul de la Rosia Montana

Saturday, May 23, 2009

The Midas Touch

A friend of mine sent this to me. It is a modern morality play, if the term “modern morals” is not itself a contradiction in terms.

PBS - Gold Futures - Rosia Montana from Lee Wilkins on Vimeo.

It is 54 minutes long. But if you haven't time to watch the film, let me summarize it for you.

Very simply, there is a gold mine in Rosia Montana, a village in Romania. This is not news; there has always been a gold mine Rosia Montana, and one can still explore the tunnels dug by the Romans, from whom Romania is named. Gold is not Rosia Monana's only form of wealth. The mountain also gives silver and copper, but even that is not the end of it. It is a place of stunning beauty, as you may see in the film, but it also has fertile fields, verdant pastures, and rivers brimming with fish. There is no end of the natural wealth and there ought to be no end of natural prosperity and happiness.

But there is not. There is, in fact, poverty. None of this is news. What is new is that a Canadian company wants to mine in Rosia Montana. But “mine” is perhaps not the right word. Rather, they want to destroy the mountain, and in destroying the mountain they must destroy the village. They want to replace the village with a lake of cyanide to reduce a ton of rock to a grain of gold. In only 17 years, it is their plan to reduce the mountain of gold to a heap of slag. This is not to say that the Canadians are being unfair; they are more than willing to pay the villagers. Some have accepted, others are resisting. And they promise to turn the slag into a garden.

Now, it is not my place to tell the villagers what they should do. It is neither my village nor my country, and these are decisions which only the people of Rosia Montana and the government of Romania can make. But whether the villagers decide to stay or go, the decision they make is a sign and symbol of something much wider, and part of something much greater. To be specific, it is part of a great joke about capitalism. But it is a joke that no one seems to get. So here is the punchline: Rosia Montana is a place of great natural wealth, BUT THERE IS NO INCOME (as one of the villagers in the film put it). Now, here is a place that has received every gift that a loving God could bestow on any piece of ground: mountains full of minerals, valleys full of farms, pastures full of animals, rivers full of fish. It is a place that could—and has—supported tens of thousands in peace and prosperity, but under capitalism, it cannot provide work for a thousand. An area that should be prosperous and happy becomes an area of forced idleness. There is wealth, real wealth, but there are no jobs, and people, young people especially—that is, the future—feel they must leave. And if they leave with a few Euros provided by the Canadians, who can blame them?

But still there is the joke. The joke is that while the villagers have real wealth, the Canadians have financial wealth, and under capitalism, the latter is more important than the former. The bits of paper with the € printed on them are heavier than gold; the sterile bankers notes more fecund than fertile fields. We may laugh at the joke; we may even laugh at the Romanians, but we are caught in the same joke. In this country, no less than in Romania, men who make naught but bits of paper (called “financial derivatives”) have brought a great country to its knees. These men contributed not so much as a grain of wheat to the commonwealth, but from our common wealth we have paid them 100's of billions of dollars, and will pay them more still as a reward for their failures. At least the Canadians will pay something for their destruction of the village; we must pay for the rope they will use to hang us, and pay a monopoly price at that.

Under capitalism, the natural order of things is reversed. The money that should serve as a convenience for the trade of real things becomes the master of real things—and real people. The natural connection between wealth and work is broken, and those who hold real wealth got with real work become the servants of those with financial wealth who do no work.

The situation is Rosia Montana is repeated all over the world, wherever there is wealth that can be exploited. The obvious example is oil. Oil also holds the promise of easy money, of wealth without work, but the usual result for a nation rich in oil is neither wealth nor work. Or rather, the wealth is confined to a few, usually foreigners and their local political servants, while the rest have no work and hence no wealth. A bit of a dole is all they can expect. It may be a generous dole, as it used to be in Saudi Arabia; sometimes it is a pittance; more often it is nothing. Only a few places, such as Norway, have treated such wealth as the common property of the nation and attempted to use it to expand the real wealth of the nation, as token against the day when the oil runs out.

Gold comes out of the ground very slowly. That is as it should be. It is a resource for the ages, and not just for one generation, and certainly not for a generation of foreigners. To each generation, the mountain gives a few flakes, so that they might make merry at the end of the day, or bring the wife and children some small gifts. And the children will grow up to bring a gift to their wives. But the Canadians want to compress 2,000 years of mining into 17 years, to take all the wealth of the red mountains in one fell swoop, and leave behind a desert. True, they say they will leave behind a garden, and they may actually mean that. But once all the battles are over, once the gold is gone, there will be little reason to fulfill the promises. Soon after the mine is opened and the mountain begins to shrink, the Canadian director will call the Romanian manager and tell him, “We made €100 million, last year; we need to make €120 this year. Cut the budget.” And the next year they will say 140, and then 200. What budget do you think they will cut?

They made the same promises in Baia Mare, in the North of Romania. But in the year 2000, the cyanide lake broke, and wound its way into the valley and the river Tisza and the Danube, rendering the valley sterile and dangerous and the fish poisoned. It was the biggest environmental disaster in Europe since Chernobyl. They cannot farm or fish the area for 20 years. Some garden. “Ah, but here it will be different. Our lake will never break; we will break the mountain, but it will not break our lake; we are stronger than nature.” Maybe, but the cyanide must go somewhere, some day.

This whole process is called “investment,” which means that nations like Romania with real wealth must go hat in hand to countries with financial wealth. They must beg in Bruxelles for permission to eat their own bread, for the bits of paper without which (apparently) wheat will not grow and fish will not bite. As it is, the farmers and factories cannot compete with the system of organized subsidies and exploitation known as “globalization,” a system meant to suck the life out of poor countries for the benefit of (financially) rich ones. If things proceed as the usually do in these cases, it will be impossible for the government of Romania to resist the pressure to sell the real wealth of Romania for the “investment” wealth of the Canadians. Yet there is something else that may stop the project: the death of a system that demands such projects.

There are people in Romania who are old enough to have witnessed the death of empires; they have see the passing of the kingdom, of the fascists, of the communists, and soon, I am convinced, the passing of the capitalists; that system, like the others, cannot survive its own “success”; the bits of paper aren't real wealth, and the people who have real wealth got with real work will tire of working for others and demand to work for themselves.

It should be a trivial matter to organize the wealth of Romania into a real economic system. It should not be much of problem to make fertile fields prosperous, to make good and useful things for their neighbors, to trade with the other cities of Romania and with the neighboring countries, all of whom need some of what Romania has, just as Romania can use something of their surplus. If bits of paper are all that stand in the way, then such paper can be printed in Bucharest, backed by the real wealth of the nation. It takes only the will to do so. If small nations can realize their own wealth, no one can stop them; if not, they must work for Canadians, for such work as can be found, and there won't be much of it. For the rest, they must go to Spain or Germany; they must enrich another country and forget their own language.

The other joke about such projects is that they are not good investments. They are too capital intensive, and depend on gold staying at or above a certain price. But ten years ago, the price was only $250/oz., and if the current troubles pass without incident, it may be that again, in which case the mine would be unprofitable. But if this really is the passing of an era, the fall of an empire, then the price might go to $5,000/oz. In that case, Romania will need its gold, and whoever rules Romania will will not let it out, whatever promises they have made to the Canadians. The Canadians have no army to enforce their claims, and the rest of Europe will have concerns of its own. The Canadians will lose their investment, just as the people of Rosia Montana lost their village.

I have called capitalism a great joke, but it is also a grand myth, namely the Myth of Midas, he whose touch turned everything to gold. Capitalism also turns all it touches into gold, but a strange gold that, as for the King, can not feed itself, and which turns every beloved thing, everything of real value, into something cold and heartless and still. Nobody knows what will happen, but it would be dangerous to think that what worked yesterday will work in the future. But it is a myth that these things ever worked for places like Romania, and a greater myth to think that Romania needs them to work. She has both the gold and the food to feed herself, and feed on a grand scale.

30 comments:

Peregrinus_PF said...

In your last paragraph, you call Capitalism "a great joke". It is not. It is, just as socialism is, a perversion of the natural order and God's Natural Law.

Saturday, May 23, 2009 9:24:00 AM CDT

John Médaille said...

But every joke "violates" some law. Think of a whole society slipping on a banana peel.

Saturday, May 23, 2009 10:08:00 AM CDT

Jesse said...

To call something a joke doesn't necessarily mean one finds it funny. I mean, I can say, After reading that quality piece someone's going to criticize the use of the term "joke," are you kidding? And not imply that I find any humor in the fact :-)

Saturday, May 23, 2009 12:05:00 PM CDT

JimB said...

Convincing the populace of "developed" countries that money isn't wealth seems an insurmountable task without conversion. I think that is what Peregrinus was alluding to. I was reading Belloc's description of "the modern mind" today after which he went on to describe how forced education in public schools perpetuates the modern mind. I would take that even further to the colleges - take Harvard for example, who is held up as the "gold standard" (pun intended) of legal and financial education - especially among the Wall Street world of financial alchemy. Obama's chief financial adviser is none other than Larry Summers - the former President of Harvard.

Saturday, May 23, 2009 12:43:00 PM CDT

Peregrinus_PF said...

Yep. Like slipping on a banana, but falling on a bed of rusty spikes

Saturday, May 23, 2009 3:50:00 PM CDT

A Romanian distributist said...

When John called Capitalism a "great joke" he was right. And the Canadian mining industry is a case in point. It has emerged as a world leader - it ranks fourth in gold - due to both government support and Canada's big financial institutions (most of the money subscribed to the mining projects was raised in the form of "venture capital" mostly on the Vancouver and Toronto stock exchange) Canadian government has played a significant role in promoting mining overseas. For instance, the mining corporations can deduct interest incurred on borrowing for their foreign subsidiaries, intercorporate dividents are exempt from income tax in Canada, profits generated by subsidiaries in countries with which Canada has a tax treaty can be repatriated free of income tax in Canada itself,overseas exploration and "development" expenses can be deducted from tax under certain condition up to 100% ( I wonder if expenses on relocating the village of Rosia Montana could be deducted from tax)etc. The Canadian government actively supports the mining "diaspora" through its agencies such as EDC (Export Development Corporation) which is exempt from Canada's Freedon of Information Act and the Environment Assesment Act because it is a Crown Corporation. All in all, the "Canadianization" of mining across the planet is largely a result of tax write-offs for foreign exploration and "development" expenses. It is also the result of the liberalisation and privatisation of mining worldwide. As Distributists have said over and over again such processes ( enacted or supervised by the World Bank and UN agencies), made fun of the "free market" - they required substantial policy intervention and financial subsidies. Lately, the mining industry has cleaned up its image rather than reform its putative practices. Gold and diamonds are attractive for their profitability not their usefulness. And such high profitability is also secured through careful control of the gold market by powerful bodies such as the World Gold Council. My conclusion: Distributists should oppose large-scale mining because 1) it is a Capitalist anti-free market practice -by Capitalism I understand with John, a joke of free market 2) it is a top-down enterprise imposed on local communities and environment -the very antitheses of "sustainable development" promoted by Distributism. 3) open-pit mines, separation by cyanide leaching are highly invasive and enviromentally damaging techniques. What is happening in Rosia Montana is a crime committed in cold blood by the Satanic trinity: corporate technologies and money along with state power and Godless human action.

Sunday, May 24, 2009 12:05:00 AM CDT

Michael Bindner said...

Gold and Euros, indeed the financial products of capitalism themselvs, have power because they are a promise of future labor. They are an agreed upon standard which compels the action of anyone who holds the same standard. The only way the Romanians can avoid promising their labor to the Canadians is to promise their labor to each other and to someone else (promising it to someone else means that it has comparative value). The other possible salvation is to ban this sort of resource extraction, which occurs in the United States every day as mountains are destroyed for coal.

Sunday, May 24, 2009 7:28:00 AM CDT

Gildas said...

I'm new here, though I've been a reader on and off for some time. I used to write for Lew Rockwell and now write for a Traditional Catholic fortnightly under a different name. I also have begun a blog www.fromthecatacombs.info and will be linking to this site, if I may. I am not a decided distributist, but I strongly incline toward it. I hope to "synthesize" the best of Distributism, Mutualism and Social Credit, though I wonder at this point if time remains for effecting any paradigm change beyond the individual level. This film is a tragi-comedy, and the post is spot on in recognizing what one would think would be obvious to all, but sadly is not. I'm sending it to family and friends and looking forward to more. Thanks for being here!

Sunday, May 24, 2009 10:17:00 AM CDT

support from Romania said...

Rosia Montana demonstrates that capitalism and comunism don't take into account the human community and neglect the human scale.

Sunday, May 24, 2009 12:49:00 PM CDT

George F. said...

Ay, but what about the response of the "human scale"? Most of the villagers left the place, while a Swiss woman moved in ...

Monday, May 25, 2009 12:32:00 AM CDT

Charlie Roy said...

Great article. Thank you for this post.

Monday, May 25, 2009 5:19:00 PM CDT

Peregrinus_PF said...

"Looks like The Distributist Review and my site have gotten hits from the "Sc Rosia Montana Gold Corporation Sa".

Monday, May 25, 2009 6:11:00 PM CDT

Clare Krishan said...

My surname is derived from a major river flowing through my hubbie's ancestral homelands (the folks at Ellis Island transcribed his Granpapa's patronymic Crişan phonetically) As in St. John Chrysostom, Criş means gold, and the river being named for where the Romans perhaps panned the precious metal smelted into the denarii our Lord debated with his disciples over -- money being fungible, we will never know which coin was minted from which mine... The area (Transylvania) is also the home of Vlad the Impaler and has suffered for centuries under schismatic Christian misrule (my grandfather-in-law was a Ruthenian in communion with Rome, while neighbors were sundry glagolithic slavonic Orthodoxies, under a Roman Catholic Austrohungarian hegemony.) The impoverished Romanians dire lack of autonomy in local affairs has a LONG tradition, its not some peculiar feature of modern economics, and the most impoverished? The Roma gypsy populations denied basic human rights to live their own cultural traditions in peace and harmony. What does Distributism have to say on their behalf? What principle entitles public authorites to vet income and levy taxes and yet deny services? Are schools and clinics only for sedentary folks rooted in the land? And my segue? Our romantic idea of a gypsy maidens costume points us back to why in insecure times, gold has a value. It's one of Divine Providence's finite Creations, its lustre and beauty make it desirable, its incorruptability and rarity means it is treasured and transferred from one generation to the next, while its portablility and divisiblility render it highly suitable for voluntary exchanges across distances not easily traversable by land, but instead navigable by water (pastoral communities can enter into trade with distant neighbors for those gifts of Our Lord's Creation not within their own reach, while Gypsies sell leather products to those without the means to raise livestock for slaughter and tanning).

Sunday, June 7, 2009 12:45:00 PM CDT

Clare Krishan said...

Carl Menger defines wealth in terms related to capital, but separate and distinct from the commodity we call 'money' used to enable the savings or economies that make the development or investment in capital possible. The Romanians would do well to read up on his definitions and NOT that of the Distributists - land is not all that the Good Lord gave us, he gave us intellect and creativity, courage and ingenuity. To reap the rewards of the productive potential of the Earth's resources (and I agree the minerals are held in common, but the skills to mine them are not - the Romans perfected the technique used by the early Californians, panning, a rather hit or miss affair by Distributist standards while modern technology has made the process a little bit more reliable, such that an entrepreneur can pay a wage up front to the workers who elect to share in the effort long before the enterprise returns a revenue from a single customer. Indeed the Holy Spirit's counsel and wisdom builds and develops man's capacity to cooperate with neighbor in sharing the fruits of his talents such that participation in the voluntary exchanges is extended via relationships of fiduciary trust to those with savings who want to preserve them by maintaining them in a productive capacity (wealth can only be consumed, it is not de-facto fecund, it can be applied to productive uses, such as paying for the college education of the saver's offspring, intellectual capital if you will, or the purchase of an ocean-going trawler for the young sprat to start his own fishery). Capital must have a capacity, if it has none, as in a defunct steel works, it is no longer capital, it is "wealth" the value of which is determined by its exchange value with another saver willing to use the resource (the land, if in a desirable location, by demolition of the buildings; or when the location has no intrinsic attraction, the buildings may be put to another use, as is the case of the casino being built in Bethlehem, PA - ugh!) Human beings are not capital, but their skills and co-operative sophistication most certainly can be. The reason the Romanians are unable to mine the gold economically themselves, and turn to Canadians instead to unleash the value buried in their lands, is their poverty in economic wisdom. First inward-looking nationalistic fascistic forces allied with Hitler, then a Communist tyrannical ideology opposed to "money" subjegated the citizenry to a zero-value added serfdom: individual creativity was quashed and allegiance to the collective enforced. Is it any wonder they are desperate to recoup the losses of the 20th century? God gave them a natural resource, and buried a treasure beneath it. The ignomy is that the financial forces of the collapsing dollar denominated credit-boom means that the Romania deposits of gold can be excavated by a foreigner using the "funny money" he gets from home, in order to pillage the "real money" from abroad. It's a true unjustice, but its not capitalism to blame, but the political chicanery of Western secular Governments that wrested production of fiduciary media away from those with the pickaxes and crucibles (the precious metal miners and minters) and gave it to the public purse, the Chancellors of the Exchequer (those with the legal privileges in Treasury to award financiers the right to print paper money). We're all in indentured servitude, not just the Romanians!

Sunday, June 7, 2009 12:48:00 PM CDT

John Médaille said...

Clare, I find your comments tendentious at best. The creativity of people is unleashed by access to tools and land (capital, if you will) and is stifled without them. The capitalist system stifles creativity. And the Romans did not just pan for gold, they mined it, as the network of Roman tunnels shows. The Canadians can "profitably" mine the gold because they get subsidies and externalize their costs. The will reduce the mountain to a slag, but if they had to restore the slag, the operation wouldn't be profitable. This externalizing of costs is common in mining. Look what happened at Baia Mare. As for Menger, he may indeed have the "perfect" system of money, but no one will ever know that, because the system has never, in all of human history, no such "commodity" money system has ever been tried. Even when money was gold, it was at a price set by the gov't. Menger managed to write a history of money without referencing a single historical source; he merely projected his own fantasies onto the past and assumed that's the way it must have happened. Unfortunately, what we know of the past contradicts Menger on each and every point. But that is not the kind of thing that would bother an Austrian idealist. Gold can be a commodity or it can be money, but it cannot be both. Anybody can prove this for himself by glancing at the gold price charts now that gold is a commodity. The price changes daily, and swings of 1-5% in a day are common. No one could possibly set prices for their goods in such circumstances. We may go to a gold standard (with gov't fixing the price of gold); we will never go to Menger's standard, and nobody this side of sanity ever will, or at least nobody ever has. Economic craziness is common, but not that crazy. I certainly agree that the creation of money should not be privatized in the banks. But then I don't think it should be privatized in mining companies either. Of the two, I prefer the banks, since a bank can be established in any community, whereas a mine can exist in only a few.

Sunday, June 7, 2009 1:52:00 PM CDT

Michael the Brave said...

Claire said: "The area (Transylvania) is also the home of Vlad the Impaler and has suffered for centuries under schismatic Christian misrule." Dear Claire, please freshen up your history. If the "schismatic Christians" you are talking about are, by any chance, Eastern Orthodox, than you have to explain in what way did the Eastern Orthodox "misruled" Transylvania for centuries when, judging by your own account, all the Eastern Orthodox that you talk about lived under Catholic "rule".

Monday, June 8, 2009 11:34:00 AM CDT

Clare Krishan said...

"no such "commodity" money system has ever been tried. Even when money was gold, it was at a price set by the gov't" But John, that's incorrect, it has. And in these here very lands without the approval of a gov't: "in colonial America most silver coinage in circulation came from Spanish America, Spain, the Netherlands, the German States, France and other foreign countries" http://www.coins.nd.edu/ColCurrency/CurrencyIntros/IntroValue.html and via subsidiarity, the locals determined a price -- exchange rate -- for the commodity based on supplies (thus Pennsylvania and New York set different "prices" by free choice, to facilitate trade by a process of subjective marginal utility agreeable to the participants) "The colonial monetary units of pounds and shillings were simply a bookkeeping system or what is called a "money of account" used to keep track of the various foreign denomination coins in circulation" America has no more "money of account" since its commodity value is no longer determined by the citizens decision on its value, but by despotic FIAT. The accounts aren't even audited (see Ron Paul's new bill demanding that the Fed become democratically accountable). How do you propose determining a just price when the tokens denominating any number you chose to apply as "fair" aren't limited in some absolute fashion? As soon as you're done being "fair" the gov't can turn around and flip the tables on us. THAT'S the banana peel you see our society slipping upon. Its not extrinsic to our system, its in-built, we voted for it! Its as unjust as Roe v. Wade but that hasn't stopped the sheeple from voting to export that madness under the Mexico City Policy with money they haven't even got ... but is borrowed from China...

Monday, June 8, 2009 5:10:00 PM CDT

John Médaille said...

Clare, I wouldn't exactly call your "history" a "rewrite," but it is certainly an insane reinterpretation of events that are well-known and well-documented, and about which there is little controversy, outside the Austrian wing-nuts. The colonies imported coinage because England forbade them from minting or printing any. It was an unsatisfactory expedient that Franklin identified as one of the major causes of the revolution. It was not a successful system and was abandoned as soon as we won the right to coin our own money. To compare money with abortion is some sort of sick joke. As a simple matter of accountancy, a thing cannot be both a "unit of account" and a commodity at the same time. It must be one or the other, or perhaps neither. I certainly don't want an "absolutely limited" money supply; that's the definition of deflation in any dynamic and expanding economy. And deflation is far worse than inflation. Deflation is a characteristic of depressions, and constitute a terrible burden for the young (and for all borrowers), since the borrowed money must be paid back in units that are worth more. If, for example, you borrow $100,000 during a time of 10% deflation, you pay back $110,000 in principle, plus the interest, which is also worth more. Money supply represents the stock of circulating goods and services, and should expand and contract with the changes in that stock. The monetary absolutism you propose is the very definition of economic failure. But I do find it interesting that in all of human history, you could find but one example of Menger's nutty scheme, one that was enforced on us by a foreign tyranny, and one which we abandoned the instant we got our freedom. Indeed, the power to coin money is that mark of sovereignty, which is why the sovereign's picture is generally on the coinage. Finally, I can only note with the proper contempt your improper contempt for the human race, those people you call the "sheeple." But then, in my experience, to be Austrian is to be arrogant.

Monday, June 8, 2009 5:31:00 PM CDT

Clare Krishan said...

The reason sound money is not popular is not because its been tried and found wanting, its because it has been found difficult, and left untried. Governments prefer to fund their unfunded mandates by seignorage of the ignorant. Institutionalized usury (which is what seignorage is) is an insidious form of serfdom not worthy of the sacrifices of our forefathers who risked all in defense of a higher purpose, no? Historically nations at war eventually find themselves in penury and turn to pillage at home to finance pillage abroad. There's nothing novel to Austrian economics, its just not popular because the German Historical School was in the ascendancy and antipathetic to a Roman Catholic humanism which rejected a priori their theoretical premises based on materialistic determinism. Man has free will, and the Austrian Emperor's foresight to defend first principles helped set Europe aright long after his dynasty was lost to a deadly internecine warfare spanning two generations (Hayek et al courageously promoted a free market economic system in the face of popular calls for collectivization that sent half of Europe back to the pagan dark ages). I think the distributive justice issue with mineral rights in Romania is one of subsidiarity in access to capital. Its a matter of political will to apply the decision making at the appropriate level of authority. If the Romanians want gold mining revenue AND slag restitution then they need to put the negotiation for price in the hands of those where those two interests coincide: the local residents and their elected authority. I think you will find that the time preference of the local authority for revenue has exceeded that of the residents for retaining their autonomy. Is that anyone's fault? Yes, the political system in Romania that permits the Government to interfere with private property. We have similar issues with eminent domain here in PA, where our Federal gov't wants to build a megamonument to 9/11 across multiple family farms without adequately remunerating the owners for the lost productive arable land. This isn't about economics, its politics. I think we can agree that gov't doesn't always act with the best interests of the governed in mind. If proponents for Distributism would focus on the mechanics of how their ideas support subsidiarity, in what ways humans may be supported in acts proper to their station by both discouraging the usurping of power by more distant spheres of influence and encouraging active responsibility within peripheral spheres of influence. Instead of a blanket condemnation of all spheres of commerce ("capitalism is a great joke") can we not rather identify certain fault lines in legitimacy of human action that indicate where integrity in the voluntary exchange has been sacrificed for private gain, leaving losses to be born by those least responsible for them? Can moral hazard ever be justified in the common good (may I do evil that good may come of it?)

Monday, June 8, 2009 5:37:00 PM CDT

Clare Krishan said...

I'm sorry I come across as arrogant, please don't attribute it to the Austrians, its just my natural combative temperament. There is much of value in the defense of "productive" enterprise in both the Distributist and Austrian perspectives, I do hope we can find the means to exchange our insights and perspectives in a fruitful fashion, one that honors intellectual gifts we've been given to serve the flourishing of mankind. I would maintain that Menger is much closer to defending the natural law in its modern phenomenon of the acting person than you give him credit for, and that "sheeple" is probably too Aristotoleian a construct for a modern liberal democrat to swallow (but I will maintain that there is no inherent "good" to be had in trusting the folly of the electorate, especially from the vantage point of the voiceless in utero, since universal suffrage has not wrought universal respect for their human dignity). As to deflation, that's a rather dated argument - the price of electronic components in computers has been rapidly deflating for most of the three decades hubby and I have been employed in that industry, but we still made enough for a handsome home and two automobiles by meeting the demands of customers for better value and expanded service. Deflation is nowhere near as dangerous to our generation as inflation - which our kids with the bubble student loans will be sure to welcome to monetize the debt we've left them. When the Social Security Fund runs dry, watch how easily the "lifestyle choice" of euthanasia will become our patriotic duty ...

Monday, June 8, 2009 6:12:00 PM CDT

Clare Krishan said...

No fan of neoconnery myself, I'm reading Mr Medaille's critique of Novak's American exceptionlism as capitalism rooted in Weber. May I make note here that the Austrian Rothbard also developed his own critique of such a Weberian worldview, embracing Smith and Marx as culpable of the same error of the "labor theory of value." http://mises.org/rothbard/RothbardOnKauder3.pdf "... the resultant holistic approach by Smith and Ricardo was subtly socialistic in still a fourth way: it established the fashion of separating Distribution from Production, and of talking only about groups of factors instead of individual factors – labor instead of laborers.)"

Monday, June 8, 2009 7:17:00 PM CDT

John Médaille said...

I usually try my best to conceal my contempt, but the Austrians would try the patience of a saint, and I'm no saint. 1. There is no critique of Weber in Medaille; there is only a critique of Novak's comic misuse of Weber. I know this because I know the author fairly well, and I see him each morning in the mirror. Weber himself is actually pretty good. 2. I thought I was familiar with Aristotle, but the use of "sheeple" is new to me. I thought it just conveyed the Austrian contempt for anything human, anything natural, any generous feeling, any authentic emotion, and, mainly, the refusal of sensible people to bow to a nutty doctrine. 3. Anyone who confuses "deflation" with a drop in a particular market simply doesn't understand the term, which only refers to overall price levels. Further, it is measured mostly by comparing homogeneous, elastic, and reproducible products. The products of a rapidly evolving technology are not comparable in that way. 4. People, in my experience, are not afraid or opposed to sound money; they generally support it. They are opposed to Menger's madness, as indeed they should be, even if their opposition earns them the title of "sheeple" from the arrogant Austrians. But anybody who takes five minutes to look at a gold price chart realizes immediately why it can't be money. Indeed, why no commodity can be the unit of account. Something can be the unit or it can be a commodity, but it cannot possibly be both, not unless you are determined to wreck an economy. 5. We managed to have 200 years of democracy without euthanasia. We got abortion after 160 years, but only after the capitalists and their Austrian fellow-travelers convinced everybody that "labor" (that is, "people") was just a "commodity" with a market price, like every other market commodity, was "owned" and therefore could be disposed of at the owner's whim. 6. I note that you avoid the issues. So far, aside from descents into contempt, you have a fictitious history for the colonies, and a grave misunderstanding of the term deflation. Is there any more economic ignorance you would like to share with us. I apologize to my readers for displaying such anger; but it know that there are limits to my patience, and the limits are right around the "sheeple" crowd, that are convinced that their untried (and untryable) nostrums are gospel truth, and the only reason nobody wants them is that they are all "sheeple." As a distributist, I am a realist, and I deal with real systems. And in real systems, where people are given a chance (which means at the material level, given access to land and tools) they generally display great creativity, intelligence, and generosity, the three things impossible under the Austrian axioms.

Monday, June 8, 2009 8:26:00 PM CDT

Clare Krishan said...

Dear John, so sorry to raise your hackles, I thought I had offered an olive branch in the form of a discussion of what similarities may be found for the defense of "wealth" as centered on "productive" enterprise as opposed to state-subsidised deceit, but I fear twas not possible (since we are operating under quite different assumptions of how to use the material world to predict the way to use the material world, I call that irrational, you prefer to call it rational as in "Further, it is measured mostly by comparing homogeneous, elastic, and reproducible products. The products of a rapidly evolving technology are not comparable in that way." which makes my point. The predilection of using crude arbitrarily-chosen aggregates to determine outcomes of sophisticated creative processes is a basic intellectual error Austrians decry in contemporary economic analysis. This social justice "third way" table http://www.cesj.org/thirdway/comparison3rdway.htm gives a taste of the folly I encounter on a daily basis, attempting to resolve the Weberian fallacy of both progressive flavors (God-fearing Jansenists or God-less Marxists) of the labor theory of value with a schizophrenic split into called "non-human" and "human" factors. Just who do these deep thinkers consider make the economic decisions for the "non"human factor? Capital never just "is," its always "becoming" more goods or less depending on the location in time and place of the actors and the prudence of their actions. A unit of labor never just "is" its either becoming "productive" or "unproductive" based on the same circumstances as the investment applied to the labor being exerted. This is where the really interesting theology begins IMHO, and the way the Pope dissected Hebrews without diseccting hypostasis in his last encyclical on hope, perhaps we could anticipate his next encyclical by dissecting ὑπάρχοντα (hyparchonta) as goods, possessions, property in all its "human" facets? As an aside: the Pope's new encyclical could offer us all a wee breather, and of course fodder for debate, http://chiesa.espresso.repubblica.it/articolo/1338746?eng=y as in translation it is sure to raise the very issues that seem to be at root of our discourse: what do we mean when we say ὑπάρχοντα? "capital" or "labor" "wage" or "price" especially from a Catholic worldview when we see it all as gift, and thus the justice we owe our Creator is one of acknowledgment in truth of the deposit made in our account, along with an exerted effort to help return all of God's children to him (the term "common good" is null&void without telos right)? If we labor merely for temporal prosperity we perish to eternal perdition, whatever definition of economics we use, no? The liberty we labor for is to have sufficient succour and leisure to pass on the gift of faith to those souls God puts in our path in the present day, without endangering our own souls first by choosing evil means, right? God bless you for engaging me and my snark and grant you success in pursuit of His justice and peace in a world that sorely needs it...!

Tuesday, June 9, 2009 3:17:00 PM CDT

Clare Krishan said...

And, ahem "great creativity, intelligence, and generosity, the three things impossible under the Austrian axioms" not true! More likely to be a feature of my bete noir "distributists" the American Catholic liturgical music publishers, whose dire subjugation of creativity, intelligence and generority as critiqued by an Austrian here: http://www.catholicity.com/commentary/tucker/05990.html would you not rather join me in "da pacem Domine"... http://www.lewrockwell.com/tucker/tucker84.html than denying other ideas may have a kernel of truth to them?

Tuesday, June 9, 2009 3:35:00 PM CDT

John Médaille said...

Concerning the Austrian making creativity, generosity, and intelligence counter to its "axioms", Clare says "Not True." True. But don't take my word for it, take Ludwig von Mises's word: "Neither love not charity nor any other sympathetic sentiments but rightly understood selfishness is what originally impelled man to adjust himself to the requirements of society, to respect the rights and freedoms of his fellow men and to substitute peaceful collaboration for enmity and conflict. HA 165" "The notions of selfishness and unselfishness as employed in such reasoning are self-contradictory and vain. As has been pointed out, every action aims at the attainment of a state of affairs that suits the actor better than the state that would prevail in the absence of this action. In this sense every action is to be qualified as selfish. The man who gives alms to hungry children does it, either because he values his own satisfaction expected from this gift higher than any other satisfaction he could buy by spending this amount of money, or because he hopes to be rewarded in the beyond. HA 735" And I could continue with a dozen such like statements. Indeed, Mises concludes (correctly) that if his axioms of action are correct, God cannot exist. One has to choose between Mises and God. But even more than that, Mises, and the whole Austrian corpus, reduces man to a mere corpse, a calculator of self-interest, every action flattened to its meanest description. It is warmed-over Benthamism, a poor re-write of Mandeville. As for creativity, the Austrians pay it lip-service, but destroy it in practice. Creativity, like every other human quality, requires a material base, but Austrianism is indifferent to the distribution of this material base and thus (effectively) indifferent to creativity in the mass of men. There is a reason for this: they don't believe people are creative. In the Austrian realms it becomes a rare a cult-like quality (the John Galt syndrome, from another Austrian who, like you, had contempt for the people and worshiped only the rich). The Acton Institute film "The Call of the Entrepreneur" makes makes basic human qualities almost an exception to the rule among the "sheeple" (what disgusting people would use such terms?) (See my critique of the film at http://distributism.blogspot.com/2007/10/cult-of-entrepreneurship.html But mostly, this is all about changing the subject. You cannot tell us how a thing can be both a commodity and a unit of account (a contradiction in terms). And "capital" is a strange construction of hyparkonta, the past participle of hyparko, to begin. At least, the LSJ doesn't give it that meaning. But I realize this was just a pointless display of "erudition" in an attempt to avoid facing the questions. Enough of this. If you want to have a conversation, you actually have to face issues, even if only occasionally. Constantly changing the subject (to liturgical music?) is not a persuasive strategy.

Tuesday, June 9, 2009 7:22:00 PM CDT

Clare Krishan said...

Enough is enough, I agree. "A change is as good as a rest" ... and the good folks at FrontPorchRepublic may oblige us with their take on the upcoming encyclical http://www.frontporchrepublic.com/?p=3731 I hope solidarity and subsidiarity are made more accessible to a dialog based on practical reason, as the Pope's Regensburg address helped us see voluntarism as coercion (the dehellenizing predations of the German Historical School may not have led a Jew such as Mises to embrace the Truth, but it certainly re-inforced his appreciation for Hellenism's veneration of Logos. A poor substitute, I grant you, but not the attack on the faith you paint it as, Mark 8:36 still applies. Good intentions will not save us from acts contrary to the law. Could one not make a case that the Mosaic law Mises was raised in is a privileged revelation of the tenets of natural law by the Author of that law to his chosen people? Other civilizations not so chosen arrived at an approximation of them by the historical process Mises describes, concluding that the optimum conduct for greatest capacity to act freely for self is to "do as you would be done by". I don't take offense where none was intended.

Wednesday, June 10, 2009 11:00:00 AM CDT

Clare Krishan said...

Enough is enough, I agree. "A change is as good as a rest" ... and the good folks at FrontPorchRepublic may oblige us with their take on the upcoming encyclical http://www.frontporchrepublic.com/?p=3731 I hope solidarity and subsidiarity are made more accessible to a dialog based on practical reason, as the Pope's Regensburg address helped us see voluntarism as coercion (the dehellenizing predations of the German Historical School may not have led a Jew such as Mises to embrace the Truth, but it certainly re-inforced his appreciation for Hellenism's veneration of Logos. A poor substitute, I grant you, but not the attack on the faith you paint it as, Mark 8:36 still applies. Good intentions will not save us from acts contrary to the law. Could one not make a case that the Mosaic law Mises was raised in is a privileged revelation of the tenets of natural law by the Author of that law to his chosen people? Other civilizations not so chosen arrived at an approximation of them by the historical process Mises describes, concluding that the optimum conduct for greatest capacity to act freely for self is to "do as you would be done by". I don't take offense where none was intended.

Wednesday, June 10, 2009 11:00:00 AM CDT

John Médaille said...

Clare, I have no idea what you could possibly mean by Mises's appreciation for the Logos, whose existence he denies. It is certainly not a term he uses in Human Action. Mises had nothing but high contempt for Aristotle and the Scholastics, and contempt seems to be the normal Austrian mode of thought. This, combined with the denial of the existence of God must certainly be taken as an attack on the faith, and Mises himself understood it that way, declaring Christianity and Capitalism to be incompatible. Mises at least is more consistent then his followers, particularly his nominally Catholic followers.

Wednesday, June 10, 2009 11:27:00 AM CDT

Joshua said...

People in Rosia Montana need jobs, need to work. I know the situation from my Romanian friend, Peter. It's more about political interests and money rush, than aboit the effects on the environment.

Friday, June 19, 2009 5:09:00 PM CDT

John Médaille said...

But Joshua, that's the point! Why should an area like Rosia Montana, rich in every possible natural resource, be materially poor? Why should they have to depend on such a violent project to eat when they are surrounded by natural wealth? Something is wrong. If they give in to the Canadians, then they will have work for 17 years. And then they will be back where they started. This is not a good solution.

Friday, June 19, 2009 5:13:00 PM CDT