How Rigged is the Economy against Individuals?

One of the prevailing themes in contemporary American public discourse is that the economy is irredeemably rigged against the little guy. The theory runs that the richest 1% have so much money that they are keeping the rest of us down.

That is a powerful story. It feeds on examples of cases where there are excessively wealthy people who do not have financial concerns that some anywhere close to the ones that ordinary citizens have. There are legitimate cases of harassment and discrimination prevent some people from achieving their potential.

However, the more complete story seems to be that despite inequalities in wealth, the potential for people to gain moderate levels of wealth is still present, even for people with median incomes.

In the FIRE community (Financial Independence/Retire Early) one of the more common targets for net worth prior to checking out of the workforce is $1M USD. Given that about 40% of American adults claim they can’t cover an unexpected $400 expense without borrowing or selling something, some argue that breaking into a seven-figure net worth is impossible.

Considering that the median household income in 2018 was estimated to be about $63K, which doesn’t include non-cash benefits like the company portion of insurance benefits, I’m more inclined to believe the people that tend to be optimistic about economic opportunities. Thomas Stanley and Sarah Stanley Fallaw’s recent book, The Next Millionaire Next Door, tends to support general optimism.

The first and most obvious allowance we must make in the whole debate, however, is that not everyone can get to the point of having a large net worth. There are people who have disabilities or medical conditions that will prevent them from engaging fully in the workforce and whose assets are regularly depleted by needed expenses. There are others who have, due to little or no fault of their own, been left in a precarious economic position because of poor choices by others or have had to leave a situation due to abuse. And, to be fair, half the households in the United States fall below the $63K income threshold, which makes it more difficult (though by no means impossible, down to a certain level) to create a large net worth.

But many in the top half of earners are not millionaires and never will be. In fact, according to Forbes in 2019, 18.6 million Americans have a net worth over a million. That means that approximately 1 in 17 people in the US are millionaires. That’s 5.6% of the population. Not bad when you think about it, but not as much as you would think.

The Next Millionaire Next Door is a follow up to Stanley’s 1996 book, The Millionaire Next Door, and basically asks if the economic system is really so rigged that no one can get ahead. He began the work with his daughter (Sarah Fallaw), and she completed the book alone due to his untimely death in 2015. The conclusion is that the basic patterns of behavior of millionaires has not changed in a fundamental sense in two decades.

The recipe for growing your net worth into the seven figures is the same as it was in 1996 and basically the same as it ever has been. Find work that uses your talents and do it vigorously. Live below your means by avoiding “status wars” with people at and above your income level. Invest your money; don’t just let it sit in a coffee can or a savings account. Do this for an extended period of time.

The upshot is that the path to becoming relatively wealthy is extremely simple. It has a lot to do with hard work and frugality. In fact, both the 1996 book and this latest book emphasize frugality as a central element of financial success. Even in 2019, the vast majority of millionaire’s surveyed had never spent more than $300 on a watch. Most of them drive Fords, Toyotas, Hondas, or Chevy’s that were purchased used, and very few of those surveys had ever spent more than $40,000 on a vehicle. Although they can “afford” to purchase more expensive products, they chose not to because the increase in value did not match the increase in price.

Also important to note is that those who accumulate wealth tend to be much more generous with their wealth. Individuals and families that have a high income, but a very low net worth do not tend to give much away. However, those that tend to save much of what they earn at whatever income level are, statistically speaking, more generous than your average American. Many of these next-door millionaires give away more than 5% of their income per year to registered charities, in addition to gifts to family.

To some this may seem counter-intuitive. Why should the savers be better givers? However, it makes sense when we consider the question from a different angle. High spenders don’t hang onto their money, but they have been mastered by their money and take pleasure in its spending. They, therefore, have a stronger love for money because of what it can get them. In contrast, the savers have mastered their money. They see it for its good beyond immediate consumption. They are also much more likely to want to see those funds invested into their community in a way that will cultivate hope for others.

The Next Millionaire Next Door leads me to believe that the majority of the “rich” are not the ones that are featured in the tabloid news or that are constantly scrabbling greedily for wealth. Rather, many of those who have obtained wealth in our society have, in some form or fashion, heeded the principles of 1 Tim 6:8–10:

But if we have food and clothing, with these we will be content. But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.

Though the political left, especially young socialists, tend to demonize those that have worked within the American economic system for decades to slowly accrue wealth, that demonization appears to be unwarranted. Those Christians who demean others, especially other Christians, for building businesses, working hard, participating in the community, giving regularly, and still managing to cultivate relative wealth are missing the fact that many of the next-door millionaires have done so by not loving money.

This is an interesting reversal. Next-door millionaires tend to be those who are generally content with food and clothing. They did not desire the wealth, but when they acquired wealth, they were good stewards of it. Statistically speaking, they give generously, live modestly, and work diligently. In fact, for most of those highlighted in this book, becoming wealthy was a secondary result of living wisely with those behaviors.

This sort of study might be helpful in overturning some negative perceptions and hostile rhetoric toward a portion of the population that has been diligent and, often, less self-interested than others in their pursuit of the good life. In this case, the good life being defined not as the unending accumulation of wealth, but of working hard, loving family and neighbor, and stewarding resources to have a reasonably secure future. In the United States that sort of lifestyle is often (but not always) rewarded with an abundance of resources over time.

Your Money or Your Life - A Review

In 1992 a little book was released that is still creating ripples today, nearly three decades and three editions later. Vicki Robin and Joe Dominguez published Your Money or Your Life not long after a major stock market crash on Black Monday 1987, as the United States was suffering under a slow-recovery recession after a decade of decadence. Your Money or Your Life is largely credited as the inspiration of the FIRE movement, which calls people to work hard, live frugally, save vigorously to achieve financial independence with the goal of being able to step away from the daily grind years before normal cultural expectations.

In true American fashion, the book is fashioned as a simple nine-step process that raises the reader’s awareness of where your money has gone, where it is going, and where you would really like it to go. The central concept of the book is that in the modern economy, humans trade time for money. And, since time is the one thing every human has a limited amount of in this life, they describe the employment relationship as one of trading life energy for money, hence the title: Your Money or Your Life.

As with many truly helpful things, the book’s premise is incredibly simple: For a great many people, raising awareness of expenses and asking a few value questions can reorient attitudes in ways that help shake of consumeristic habits and lead to a great deal more financial freedom. The concept works much better for those that are middle-income or higher, since the poor tend to already have a tight focus on their finances. But as Robins points out, many middle-income people have no idea where their money goes and are wasting a great deal of their time earning money to spend on things or experiences that give little satisfaction.

The practical advice in Your Money or Your Life is sound, which helps explain why a third revision was just released. The core is sound, though the specifics of recommendations have had to change. For example, in a low interest environment, the early advice to use bonds to fund retirement would be a relatively quick path to ruin.

Philosophically the book is all over the place. It mixes a few proof-texts from the Bible with Eastern thought, as well as some assumptions that are more American than anything else. However, by common grace there is a helpful integrity to the outlook, however quilted the underlying ideas may be.

One of the more helpful ideas that the book promotes is that all of life should be viewed as a whole. We can’t see our budget as one piece of our lives, our work as another, and our home life as something entirely different. All of them are of a piece and impact one another, as anyone who has worked alongside someone going through a divorce can attest. This isn’t to suggest that getting one thing right fixes everything, but what Robin and Dominquez point out is that viewing them all together helps us make better choices in the places we have agency. Spending money is, for many of us, one of the places we have the most agency. Therefore, the encouraging people to ask questions about how their spending reflects their values can lead to changes that open up opportunities in other areas.

Another significant element of the book is that it forces readers to rethink the nature of work. They argue,

The real problem with work, then, is not that our expectations are too high. It’s that we have confused work with paid employment. Redefining “work” as simply any productive or purposeful activity, with paid employment being just one activity among many, frees us from the false assumption that what we do to put food on the table and a roof over our heads should also provide us with our sense of meaning, purpose and fulfillment. Breaking the link between work and money allows us to reclaim balance and sanity.

There are too many eggs in the “work” basket for many of us. We define ourselves by our job and invest our best energy into tasks that may be demeaning or seem to be designed to be frustrating.

To some degree, that is the nature of an industrialized economy, which sometimes reduces tasks to repetitive minutia in the name of efficiency. Connected to this reduction is that due to the liquidity of modernity, there are few stable aspects of a contemporary human’s life. We are likely to change jobs, move thousands of miles, and undergo shifts in vocation that would have been unthinkable for the majority of human history. Work was meant to be satisfying as we create and organize, being made in the image of God. What work has become is not what it was meant to be. This is helpful truth that the authors recognize.

The book carries some significant baggage philosophically. The authors seem to assume that one of the primary purposes of humanity is to achieve a degree of autonomy. The number of cases of divorce they seem to celebrate is significant. There is an assumption that happiness can be achieved in some measure through material goods. All this and more lie beneath the surface, which should cause the Christian to read this book with care. At the same time, the advice is presented by non-Christians who argue for a distinct worldview, which makes it easier to chew the meat and spit the bones than when someone reads Dave Ramsey or another of the Christian financial gurus, where a heavy dose of proof-texts and testimonies saturated with church language can cause us to lower our guard, allowing greed to slip in when we least expect it. Your Money or Your Life is helpful, in part, because it is written from a different perspective that can be illuminating even as we filter it carefully.

For many American Christians, the lure of consumerism has led to an increase in consumer debt, a lifestyle of excess that would have shamed earlier generations of believers, and an increasing difficulty to enjoy the benefits of real wealth in one of the most affluent societies on earth. Books like Your Money or Your Life can present an alternative picture that is, in fact, closer to a biblical attitude toward money and the unity of life than many similar products from faith oriented Christian publishers offer. It’s high time American Christians began to rethink their money habits, and Your Money or Your Life is a decent place to start.

Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Fully Revised and Updated for 2018

By Robin, Vicki, Dominguez, Joe, Mr. Money Mustache

Buy on Amazon

The Humane Economy of Wilhelm Ropke

To some people, free market economics is the worst social evil of our age that is responsible for every other social evil. What causes Racism? Capitalism. Child abuse? Free market. Objectification of women? The market economy. War? Economic liberty. Poverty? The same. Bad hair days? Definitely capitalism, too. You get the idea.

On the other hand, there are others for whom free market economics are akin to the good news of Jesus Christ. Andrew Carnegie did, after all, write a book called, The Gospel of Wealth, which largely extols the market economy. There are others to this day who see capitalism as not merely permissible by God, but actually required by a correct reading of Scripture.

In reality, liberty, including economic freedom, is a necessary condition for human flourishing, but it isn’t a sufficient condition. The free market economy the cleanest dirty shirt we’ve got. Like any human system, it has sinful people involved, so it is subject to abuse and distortion. Unlike other human economies that have been envisioned, it has the best means to keep people’s natural tendencies toward evil and oppression in check.

One of the most careful proponents of a free market that I’ve read in Wilhelm Röpke. He was a German who emigrated to Turkey in 1933 because of his resistance to the National Socialist regime. Early in his life he was inspired by socialism, later by the Austrian school of economics, and finally landed on a position that encourages a free market with targeted and limited government interventions. Röpke argued for what might be described as a humane capitalism. Röpke was one of the main thinkers that inspired the creation of the West German economic system after World War II, which helped to shape its balance between social welfare and free market, a system that resulted in West Germany rapidly recovering and developing into an economic power, with East Germany lagging behind, mired in socialism.

Röpke’s classic book, A Humane Economy, is an important book for socialists and libertarians to read so they understand both the needs for and perils of a free market.

One of Röpke’s concerns is over “mass society.” It was the enmassment of human activity that Röpke had witnessed in the rise of fascism in Europe before the war. Like other forms of socialism, the National Socialists ceased to recognize people as individuals or small units, and pursued global solutions with a faceless homo economicus as the actor. This faceless stand in for humans sometimes makes a good generalization, but it fails to take into account the goodness of owning a business, of small firms being able to compete in a grand economy, and of individual craftsmanship. At the extremes, unfettered capitalism and socialism lend themselves to aggregating humans into the faceless mass. Röpke was just as opposed to corporate monopolies as he was to state monopolies. Unlike some contemporary neoliberals, Röpke recognized that the power of the state was essential in preventing any sort of monopoly from forming.

What makes Röpke particularly significant is that he honestly represents the damage that redistributive programs like welfare can have as they encourage inflationary economics and can reduce the incentives to engage in meaningful economic activity. At the same time, he demonstrates that well-designed welfare systems can be essential to provide a safety net and can actually prevent the worst cases of abuse by the state and by corporate entities. Röpke is exactly the sort of thinker that will make people on both poles of contemporary social and economic debate uncomfortable, which is one of the best reasons to listen to him.

Another important aspect of Röpke’s perspective is that he emphasizes the necessary balance between collectivism and individualism. Both ideas in the extreme are debilitating to society. Röpke writes, “Man can fulfill his nature only by freely becoming part of a community and having a sense of solidarity with it. Otherwise he leads a miserable existence and he knows it.” A more apt criticism of most forms of socialism and the contemporary economy in the United States could not be written. In socialism, one is forced to assimilate with the mass, to contribute as the authorities deem necessary and to receive in exchange only that which the collective deems warranted. In late post-industrial capitalism, one tends to be isolated from the collective, set to gain what one can earn on her own, and catechized to believe that individual freedom is something of a summum bonum. To some degree, at least, Röpke seems to offer a golden mean.

In A Humane Economy there is resistance both to state totalitarianism and the totalitarian utilitarianism of some economics. But he is unquestionably opposed to the ravages of Communism. Röpke argues:

“Totalitarianism gains ground exactly to the extent that the human victims of this process of [social] disintegration suffer from frustration and non-fulfillment of their life as a whole because they have lost the true, pre-eminently non-material conditions of human happiness.”

He continues,

“What the free world has to set against Communism is not the cult of the standard of living and productivity or some contrary hysteria, ideology, or myth. This would merely be borrowing Communism’s own weapons. What we need is to bethink ourselves quietly and soberly of truth, freedom, justice, human dignity, and respect of human life and the ultimate values. For these we must set our course unerringly; we must cherish and strengthen the spiritual and moral foundations of these values and vital goods and try to create and preserve for mankind such forms of life as are appropriate to human nature and support and protect its conditions.”

This sort of attitude is what makes Röpke so helpful. He recognizes the horrors of socialistic economics, but also sees the abyss that is a purely materialistic utilitarian capitalism. Röpke reminds us that at the heart of the economy is the human. We are not graphs and statistics alone. Those things can be helpful, but they are not enough. We need to be more humane by treating people around us like humans. Economics can only function when it is constrained by virtue.

A Humane Economy: The Social Framework of the Free Market

By Röpke, Wilhelm

Buy on Amazon

Consumer Debt and the Coming Recession

For those that pay attention to such things, the news is filled with extreme views about the current and future state of the economy. At the same moment in time, there are pundits arguing that most Americans are in abject economic misery, while others argue that life has never been better economically. One group is arguing that imminent economic doom is upon us, another tells us that things are only going up from here.

If most of us are honest, in the decade since the Great Recession, things have generally gotten better for most people. However, in many cases, people do not feel great about the economy and, at the same time, are setting themselves up for problems during the next recession.

The Inevitability of Recessions and Stock Declines

News reports predicting a coming economic recession or a significant stock market decline are correct. They have no idea when those things are going to come, but some sort of economic perturbation is pretty much inevitable.

One of the more interesting aspects of our attention economy is that when the next economic dip happens, its significance will be determined, in large part, by how people respond. For example, if people get skittish and sell during a stock market decline, that will make the stock market decline even worse. If people alter their consumer behaviors radically during a recession, that is likely to make the recession worse.

More significant than whether and when a recession is coming (it is and who knows) is how we are living day to day in anticipation of those events.

A Plea for Simple Living

There is no question that some people are struggling to meet basic necessities already. Due to a medical condition, loss of a job, a very low wage job, or bad debt choices earlier in life, many people are living paycheck to paycheck. If that is you, then feel free to check out. This post is written to the vast majority of us who are in the middle class and have some economic margin.

We once received a gift subscription to a magazine called Real Simple that amounts to an advertisement for a high-end consumeristic minimalist lifestyle. All the pictures were of perfect rooms with “simple” solutions to problems like magazine storage or whatever, but the solutions always cost hundreds of dollars. The result was an aesthetic simplicity, but that’s not how they got there. According to that style magazine, simplicity is a consumer good that is really expensive.

Simple living is less about what stuff you own and more about what activities and services you deem necessary. Simple living at its best is simply asking what aspects of life are necessary and eliminating those that don’t fit that definition. Another definition is that simple living is asking what we do that glorifies God and minimizing the extras.

When we stop asking risk vs. reward questions about our lifestyle choices, we put ourselves into the situation like the couple making $160,000 who were described as living in “modest oppression” because they “couldn’t afford” everything they wanted. Alyssa Quart’s description of the largely self-caused mental and emotional stresses of the middle class in her 2018 book, Squeezed, should serve as a warning to rational minds to make better choices.

As Christians in the American middle class, we really need to begin asking “why” questions if we are going to be effective stewards of our time, treasure, and opportunity. We have the means to get the gospel to the ends of the earth and instead we are spending our money to overflow landfills with useless plastic.

The simple life is about being focused on what adds gospel-value to the world and spending our money on that.

Avoiding Comparisons

Also in Squeezed, Quart writes, “While Americans overall may live better than medieval aristocrats could even dream of, that means nothing when oligarchs live next door, flaunting their luxurious homes.”

The funny thing about comparisons is that we tend to make them with those living above our means. Very few of us look at those who are legitimately struggling financially and go home thankful for our abundance. Instead, largely due to the mystique of television and movies in which everything is always perfect, we continually moan about the inadequacy of our resources.

There is a reason God gave us the 10th Commandment.

Did you have a nice vacation at home? Well, the other guy at work took his kids on a safari adventure. Now that vacation doesn’t look so good.

Does your daughter enjoy soccer? The neighbor down the street does, too, so they’ve invested thousands into clinics, travel teams, physical training, and other goods and services designed to get their child ahead. Suddenly the local rec league isn’t very compelling.

There isn’t necessarily anything wrong with a big vacation or pursuing excellence in sports, but those are often excesses that we try to have without making sacrifices to compensate.

The result is that many people who are making a whole lot of money are spending all of it and a little bit more.

Rising Debt Loads

One of more frightening statistics, in my opinion, is the rise in household debt to the levels prior to the 2008 recession.

The Great Recession was rough for a lot of people in large part because people were up to their ears in debt when the problem started. For a few years society seemed to learn a lesson, but now it appears that we have forgotten.

I’m not on the “no debt ever” train, for a variety of reasons. However, I do believe that we typically position ourselves better to survive economic downturns if we minimize debt and seek to eliminate it when times are good.

A lot of the debt right now is being driven by a perception that the stock market is going to keep going up and up. In the long run this is probably true, but there may be a point at which half of the money invested in the market will “disappear” just like it did in 2008 and 2009. That is never a great feeling, but it is a really terrible feeling when you know that your pay is likely to stagnate for a while, you may lose your job, and the company bonus you budgeted to pay for your vacation is unlikely to materialize. In other words, when you are up to your ears in debt, the clouds of economic doom look a lot more ominous.

Market expert is not a title I’d claim, but I remember the pain of debt-ridden people who had a high salary but large payments and weren’t seeing the economic growth they were counting on. One way to eliminate that pain is to avoid debt and eradicate it. To do that, we should consider the common causes of debt.

The Cause of Debt

The problem most middle-class Americans have is that they are spending too much on things that they enjoy too little and bring too little glory to God.

Instead of comparing ourselves to our neighbors, we ought to be regularly asking of every expenditure how this glorifies God. We will certainly get things wrong from time to time, but a gospel-focused consumer mind will likely resist the urge to overspend on things that really do little good for anyone.

Once we get above a certain financial level, most debt is driven by buying more car than we need, a nicer house than necessary, services that we only use occasionally, and products that offer little benefit in the long run. Evaluate your household spending for the last year with a critical eye and this will likely become self-evident.

This means that rather than being trapped in system that makes us do bad things, we are in a culture that encourages us to do dumb things and we usually don’t invest the will power to stop.

For most of us, our debt is a problem we have created by being unwilling to limit our consumer choices to that which glorifies God.

We are setting ourselves up for misery in the future with our choices today. Why not begin making simple, better choices that will leave us happier when the next downturn comes?

The Green New Deal - A Review

The Green New Deal (GND) will either take off or get crushed by this most recent economic crisis. On the one hand, proponents of the GND argue they can provide everyone with everything they need (and a pony) while making everything greener, safer, and happier. On the other hand, we are doing a pretty solid dryrun of the Green New Deal and most people aren’t having much fun.

Jeremy Rifkin’s book, The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth, takes a swing at making a case that a centrally planned (if not centrally controlled) economy can make things better in every respect—better jobs, more money, better ecology, etc. This has been his focus for decades now.

According to his website, Rifkin serves as an advisor to leaders in the EU on their movement toward a green economy. He also lays claim to “advising the leadership of the Peoples Republic of China on the build out and scale up of the Internet Plus Industrial Revolution infrastructure to usher in a sustainable low-carbon economy.”

Of those two significant claims to authority, the second one helps shape my concerns about his proposed policy and show why the GND may not be the good deal that its proponents support.

One of Rifkin’s major claims is that fossil fuels are on the wane and that our current economic structure, which includes a significant amount of formal and informal infrastructure based on the assumptions of a certain mode of power, will be obsolete in roughly a decade. He argues that renewable energies like solar and wind will replace the bulk of coal and natural gas generation. He also argues that regulation and obsolescence will help push the internal combustion engine far to the margins for transportation.

(On a side note, one of the major Green New Deal advocates, Alexadria Ocasio-Cortez recently celebrated the economic harms done to the oil industry by the current pandemic in a tweet. She subsequently deleted the tweet and modified it to make it sound like her joy was less effusive about other people’s pain, but whatever her intent is or was, it is clear that she and other GND advocates see the current economic crisis as an opportunity to push their plans on the world.)

Inasmuch as Rifkin sees a rise in the prevalence of solar and wind generation, I think he is correct. Those technologies are quickly becoming economical. Even without the tax subsidy provided by the federal government, I would have probably installed the solar panels on my roof. Solar, in particular, is an energy source that has many more advantages than disadvantages. Wind, too, is very clean, though there are issues with migratory bird deaths, disruption of bird nesting areas, and aesthetic concerns for people who live near them. There are more kinks to work out for wind, but there is a great deal of promise, too.

The present problem is that displacing the baseload generation of traditional power plants requires a rapid development and deployment of hydrogen storage technologies (or another storage method) to be effective. In a May 2019 article on hydrogen storage notes that, “Hydrogen may be stored at elevated density in various ways but few of these have reached commercial maturity for large scale applications.” Rifkin’s promise of an all renewable future relies on that technology maturing and being put into largescale use in just a few years. I find that unlikely.

A better answer to a shift toward hydrogen storage might be an increase in nuclear power generation, which has small scale options that are nearing approval from the Nuclear Regulatory Commission in the US that promise a significant reduction in risk and construction costs. The latter of which is the most significant issue with nuclear, though perceived risk is often the greater issue in the mind of the public.

Beyond what I view as excessive optimism is a much more insidious element of the Green New Deal in Rifkin’s model, which is that it requires submission to an increase in personal surveillance and loss of control by individuals and families.

One of the more significant demands in Alexadria Ocasio-Cortez’s grandiose GND proposals was to “retrofit every building in America.” To most people, that sounds like a promise to put in more insulation, add some weather-stripping, and maybe add a programmable thermostat. However, Rifkin gives some context to what that retrofit would include.

Rifkin is a big fan of the Internet of Things. A lot of Americans are, in fact, though the wisdom of that remains to be seen. The Internet of Things (IoT) is when people’s home appliances, home security systems, traffic lights, etc., are all connected to the internet. This is advertised as a boon because it allows you to check on your babysitter when they are alone with your child, monitor for porch pirates stealing your Amazon packages, validate whether or not you have another gallon of milk in your home, and remotely control your thermostat or garage door while you are on vacation. For Rifkin, by putting homes and civil architecture on the IoT, algorithms and the really smart people that develop them can gain efficiency. It also means that control of your privacy and your home is transferred to the entities that control the internet.

The GND infrastructure Rifkin is arguing for is one of heightened public surveillance. He outlines a failed public-private partnership in Ottawa. “The plan is to build out Canada’s first smart, digitally connected urban neighborhood, replete with state-of-the-art sensors across a seamless Internet of Things neural system. Ubiquitous sensors will provide surveillance, collecting data on activity taking place in the homes, the shops, and the streets, with the goal of helping speed efficiencies and conveniences in commerce, social life, and governance.” (38) The plan eventually fell through because people got nervous about Google’s participation. Rifkin remains very positive about the idea—in fact it is the soul of his proposal—as long as the government retains control.

There is a willfully blind aspect to Rifkin’s proposals. As he states, he is deeply involved in China’s rapidly expanding surveillance state. The ongoing human rights violations of the Chinese Communist Party against their people has been widely reported and is largely facilitated by the technological infrastructure that Rifkin is proposing. His overwhelmingly positive attitude toward China, which continues to be one of the worst polluting nations on the planet, is mysterious and naïve. This is no tu quoque argument, because Rifkin repeatedly cites China as a prime example of a nation that gets his vision.

Rifkin makes it readily apparent he is all for controlling the flow of information. He writes, “The dark side of the internet will require vigilant regulatory oversight at the local, state, and national levels. . .” (22) In context, he’s obviously concerned with controlling hackers, as the remainder of the sentence goes on about building in redundancy into the smart grid to minimize digital disruptions. It is also entirely clear from the paragraphs surrounding this brief snippet that Rifkin’s model of regulation includes more than digital redundancy and includes significant intrusion into the use of the internet. All of this intrusion for a “conceivable” chance to “increase aggregate energy efficiency to as high as 60 percent over the next twenty years.” (23) And, of course, he states that we must shift to this new remotely monitored infrastructure “because the only other alternative is to remain trapped in a dying, carbon-based Second Industrial Revolution economy.” (23)

All of this surveillance makes it possible Naomi Klein’s vision of controlling individual economic choices, in her book, On Fire, where she argues:

“Most fundamentally, any credible Green New Deal needs a concrete plan for ensuring that the salaries from all the good green jobs it creates aren’t immediately poured into high-consumer lifestyles that inadvertently end up increasing emissions––a scenario where everyone has a good job and lots of disposable income and it all gets spent on throwaway crap from China destined for the landfill.” (284)

When you are monitoring people’s activities in their homes, on the roads, in the sidewalks, and everywhere they do to maximize their commercial lives, then it is possible to ensure they don’t slip up and order an extra shirt online.

That others aren’t cringing at the proposals embedded in the Green New Deal shows that they have either gone round the bend, presuming a beneficent ruling class in government and in corporations, or they haven’t read the published literature. As for me, I want a greener future, too, but the vision outlined by advocates of the Green New Deal make it clear that our hope for the days to come lies in radically different places.

The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth

By Rifkin, Jeremy

Buy on Amazon

NOTE: I received a gratis copy of this volume from the publisher with no expectation of a positive review.

The Accidental Social Entrepreneur - A Review

Social entrepreneurship is the pursuit of business with social benefit as a primary concern rather than simply profit. In some cases, social entrepreneurship relies upon the intended social benefit as the chief marketing point. In the best cases, the entrepreneurs provide a good, needed service at a competitive price, but distribute profits with something other than the bottom line or shareholder value as the primary concern.

A reasonable profit is a good thing and necessary for a humane economy. Entrepreneurs generally risk their livelihood for their business. Profits allow business to continue, entrepreneurs to feed their families, companies to expand, and more people get jobs that support their families. Poverty will not be ended without business.

In The Accidental Social Entrepreneur, Grant Smith outlines his own life experience as a social entrepreneur. In a memoir-style book, he covers the successes, challenges, and failures he has experienced while running his Hand In Hand company with several faces and outlets. In one of its most significant aspects, Smith’s company became one of the largest home construction entities in Kenya.

Smith recognizes that business is a good thing. When run justly, companies provide opportunities for employees to feed their families. In Smith’s accounting, justice includes remunerating workers in proportion to the value they add to the company rather than as little as the market will allow. So, for example, although unskilled labor is paid near-starvation wages in Kenya, Smith’s construction company chooses to pay a significantly higher wage that ensures greater financial stability for those laborers. It works in this particular application because the profit margins for home construction in Kenya are very high. The difference between the market rate and the rate his company pays is found in the profit taken by the company itself.

For Smith, social entrepreneurship means building businesses that meet legitimate needs at a competitive price, providing a decent (though by no means extravagant) living for workers in proportion to the value they add (he is very big on merit based pay), and using a fair portion of remaining profits to invest in other charitable activities. Investors in Smith’s various schemes get a benefit, but that benefit is limited by other goals that the investors agree to in advance. Smith runs companies, but they are companies that take all stakeholders into account.

The Accidental Social Entrepreneur is an encouraging volume. It celebrates the good of business for creating wealth and freeing people from poverty. It also introduces a paradigm of valuing something besides maximizing profits to the discussion. Smith’s book strikes a healthy balance between recognizing the good of markets and considering the potential harms of markets.

Although he does not state it directly, Smith does seem to lean toward the moral superiority of his company’s practice of redistributing up to 85% of profits to more direct charitable causes. It is commendable that Smith decided to do so, but by no means morally obligatory. In some cases, by choosing to distribute profit rather than reinvest in other ventures, Smith may have made his company’s endeavors more difficult. This is by no means the major emphasis of the book, but more discussion would have been beneficial.

Another helpful aspect of this book is Smith’s honesty about times that his endeavors failed. In some cases, he even admits the mistakes that prevented entrepreneurial efforts from being successful. This adds value to the book, because it shows that the life of the entrepreneur is not necessarily a straight line toward success or failure. Rather, the entrepreneurs should expect ups and downs, successes and failures that hopefully contribute to the general good of society.

Hopefully, The Accidental Social Entrepreneur inspires some readers to take a step toward building a business with society in mind. Even if they take a more profit-oriented approach than Smith, the world will be a better place. Pastors and lay leaders in church would benefit from reading the book. It could shape social endeavors facilitated through the local church.

The Accidental Social Entrepreneur

By Grant Smith

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Note: I received a gratis copy of this volume from the publisher with no expectation of a positive review.

Squeezed - A Review

Even before the Great Recession and the slow climb out of it, many people expressed angst over their economic situation. As long as I can remember, and likely for all of human history, most people have expressed a sense that they can’t get ahead and that true financial stability is just out of reach. One thing that has shifted in the last few generations, however, is that people have argued that having a family is financially out of reach because of their current economic situation.

A desire for economic stability is leading many young people to delay marriage until their late 20s or early 30s. Then, once couples do get married, they often decide to wait to have children “until they can afford it.” The frequent, repeated news articles that tell people it costs a quarter million dollars or more to raise a child tend to entrench such arguments.

In her recent book, Squeezed: Why Our Families Can’t Afford America, Alissa Quart attempts to make these arguments in a book length format. She uses a journalistic-style, with supporting statistics interwoven with sympathetic anecdotes to make her case. The style itself is useful for convincing either (a) non-critical readers or (b) those already convinced. For those skeptical that centralized government solutions like UBI are the best solution for people’s feelings of dis-ease, the content of Quart’s book tends to make quite the opposite case that Quart intends.

There are certainly problems within our current economic system. Some of the cases that Quart outlines help to show what those problems are. For example, the injustice of our broken immigration system is evident in Chapter 5 of Squeezed and, in some ways, represents reality. However, what Quart actually shows is that consumerism is a miserable disease and that, in general, life would get a whole lot better for people if they turned off their televisions, got off the internet, and focused on living the life they can afford and loving the people around them.

A couple of the stories Quart highlights show the main problems with Americans that keep them from feeling they can afford a family are (a) a lack of permanent commitment in marriage and (b) covetousness.

The Damage of Impermanent Marriages

Quart begins the book with her own story. She and her husband were freelance writers living in a rent-controlled apartment in New York City when they had their first child. She describes the burden of paying $1,500 for the medical care she and her daughter incurred during delivery. Subsequently, they experienced “financial vertigo” because, “We first hired a nearly full-time sitter and most of my own take-home earnings as an editor went directly to her. Eventually, my earnings also flowed to my daughter’s cheerfully boho day care . . .” (pg. 3). The financial pressure they felt was primarily self-induced fear of “tumbling out of [their] class position.” (pg. 4) Contributing to this is the apparent sense that one must maintain one’s career even if it is financially unwise to do so.

Though it is not clearly defined, “middle class” in this book appears to be defined as living above your means without fear of financial repercussions. So, for Quart, it was essential for her to be able to fund a nanny so she could retain professional pride and independence from her husband, no matter what the financial burden or social cost to her offspring.

There are several cases throughout this volume that illustrate that fear of being left or getting divorced is what drives a lot of the financial pressure on her subjects. In other words, when a spouse fears that his or her marriage is impermanent and the spouse and their income may disappear at any moment, then there is terrific pressure to maintain a career at any and all costs. Quart does not identify this fear explicitly, but it is an obvious undercurrent throughout the book for those with eyes to see it. This is why the supposed 70% gender pay gap is so insidious in the eyes of many progressives.

If couples both valued and were committed to the permanence of marriage, much of the angst that Quart describes about finding suitable and cost-effective child care would diminish.

Covetousness

The other major problem illustrated by this book is not injustice, but covetousness. This is apparent in Quart’s story again, as she requires a personal baby sitter and then “boho daycare” for her child.

A more striking example of the problem of economic myopia and covetousness is documented in Chapter 2. Quart describes a case of “modest oppression” of a couple who made a combined household income of “around $160,000” as the department chair at a college (wife) and a part-time music composer, director of a music organization, and church organist (husband). Even given the high cost of living in New York City, it is hard to describe a couple making north of $150K as being oppressed in meaningful sense. Apparent in Quart’s description is that their unhappiness was largely due to the existence of people that appeared to be more comfortable and have fewer financial worries. Absent from Quart’s telling of their story is the idea that they might consider making different decisions (e.g., having the husband stay at home with the kids) that might alleviate the problem and result in better outcomes for everyone.

Similarly, in the same chapter Quart tells the story of an adjunct professor whose PhD was in avant garde poetry. She has a disabled son, conceived in a fling with a member of an indie rock group. There are multiple commendable aspects of the story: the adjunct was willing to work hard and she was committed first to not killing her child in utero and then to seeking proper care for him. The covetousness in this story is apparent because the adjunct believed herself to be entitled to the career of her choice––that is to be fully supported through adjuncting––because she had chosen to get an advanced degree in a particular field. There is some hope in this story because the chapter closes noting that Bolin had decided to pursue more regular employment.

Quart’s telling of these stories is intended to illicit the response that there is obvious injustice in the struggle of both of these families. However, it is clear to the casual reader that the greater portion of the financial distress in both these situations is a desire for something that is just out of reach: the idealized existence as a career advancing professional in the exact job one desires. The underlying assumption is that the world owes everyone their personally preferred lifestyle and existence. As long as people base their happiness on hanging on to social positions that are just above their income level or seeking the perfect working situation, their covetousness is destined to enhance their unhappiness.

Positives of the Book

The general premise of Squeezed is flawed, but there is value in the book.

First, there are multiple anecdotes that illustrate how significant the family and community are for financial stability. Though Quart does not draw the conclusion (instead calling for government intervention at nearly every level), it is apparent that stronger nuclear families and mediating institutions like the local church are essential to the flourishing of society. In many of the examples Quart provides, the reader can see how a strong connection to a local congregation that is functioning as the body of Christ could alleviate a great deal of stress.

Second, as noted above, the permanence of marriage tends to alleviate a lot of cost and stress. Both spouses need not pursue their careers full-bore if they trust each other to remain around. Additionally, the cost of living can be substantially reduced when both parents and children live together in the same house.

Third, in Chapter Ten, Quart highlights the work that television (or other versions of video entertainment) does in making people believe they are not well-off. Supposed “middle-class” families in SitComs are really incredibly rich. Everything on the set is in perfect condition, no one is really struggling for money, etc. The old puzzle about how the characters in Friends were able to live such apparently lavish lives in New York City is still a real phenomenon. Part of the work of the Church, then, should be to disabuse people of the fantasies of contemporary entertainment.

Conclusion

Ultimately, this is a popular-level book that will tend to convince the already convinced that a bigger government is needed to fix supposed injustices in the economy. What it really highlights is that much of our ongoing social misery is self-induced. If we readjust our expectations toward reality and focus on enjoying the relative wonders most of us experience on a daily basis, our satisfaction in life is bound to be enhanced.

Squeezed: Why Our Families Can't Afford America

By Alissa Quart

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NOTE: I received a gratis copy of this volume from the publisher with no expectation of a positive review.

Economics of Neighborly Love - A Review

Our economic activity, when done properly, is primarily about loving our neighbors. Neighbor love is not merely a description of so-called spiritual activities, like those done under the umbrella of a local church. Rather, neighbor love should shape everything we do in the home, in the marketplace, and in our neighborhoods.

In a helpful, recent book, Tom Nelson helps bring theology and economics together in a way the average Christian can understand it. His volume, The Economics of Neighborly Love: Investing in Your Community’s Compassion and Capacity, weaves together many of the themes in the Faith and Work movement in a single, digestible bundle.

Nelson’s basic assumption is that we live in a fundamentally economic world. His is not, however, an attempt to reduce humans to homo economicus. Instead, he argues for understanding humans to have the imago Dei, which leads to a demand to live compassionately among others. His basic argument in the entire book is that the best workers make the best neighbors, as long as they are working for reasons that matter.

Humans are made to flourish. Part of that flourishing is having our material needs met. Another component of flourishing is pursuing a purpose higher than ourselves. Work is a primary means by which humans flourish.

One sign of flourishing (though not the only or even best sign) is material wealth. Such wealth is a resource to be stewarded for the glory of God and the good of neighbors. It is neither the reward for holiness as the prosperity gospel argues, nor is it intrinsically evil. It is a simply one way that God provides for humans to be fruitful.

Lest Nelson be guilty of reducing flourishing to the accrual of wealth, he quickly explains that intimacy with other people, godly character, and productively contributing to the world around are vital ways that humans are fruitful. Being fruitful and productive are ways that we love the world around us by making this world a better place.

All of the productivity in the world does not do any good, however, unless it is directed toward our neighbors. Nelson explains a vision, consistent with Scripture, of how godly people can engage in a relatively free market for the glory of God.

One way humans engage wisely in economic activity is to be generous, using our wealth to provide the means for the church to do good works in the name of Christ. Another way is to actively pursue the good of the materially poor around us. In the process of helping the poor, however, a biblically shaped worldview recognizes there are forms of poverty that no amount of material support will resolve. People are desperately need of the gospel, so we are called to demonstrate it through our actions and verbalize it through our language.

As part of our economic activity, Nelson also urges Christians to fight economic injustice, to show grace to the communities around us. Most of all, people simply need to get moving. It is altogether too easy to stay cooped up in our homes, never meeting our neighbors, and thus never learning how best to meet their needs. By making personal connections and seeking the common good in all of our economic activities—not just the ones where we spend and earn—Christians can demonstrate what hope looks like to the world.

The Economics of Neighborly Love is the sort of volume that makes a great introduction to a biblical view on faith, work, and economics. Nelson shows how the ordinary lives of ordinary Christians can be leveraged to make this world a better place for the love of God and the good of our neighbors. He presents a practical vision for Christians to be salt and light in the world.

Perhaps the most important takeaway from this volume is that there is a way for Christians to show neighborly love not despite our economic system, but because of our economic system. Though Nelson recognizes that sometimes sinful people oppress others in a free market economy, he also recognizes that freedom is an important part of allowing people to fulfill their potential as beings imbued with the image of God. The freedom within the market system helps make financial prosperity accessible to many more people, which helps provide the resources for many forms of productive engagement with society.

Nelson’s book, however, will fall short of its final purpose if it fails to encourage Christians to live their lives for the good of the world around them. This is a book that deserves to be read, discussed, and shared widely as the body of Christ seeks to fulfill the greatest commandment by living out the second greatest commandment in a world of people who desperately need to be loved. The Economics of Neighborly Love is a volume that needs to be applied wholeheartedly, too.

The Economics of Neighborly Love: Investing in Your Community's Compassion and Capacity

By Tom Nelson

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Note: I received a gratis copy of this book from the publisher with no expectation of a positive review.

Letter to a Young Farmer - A Review

I was first exposed to Gene Logsdon in the 1990s when my father brought home a book from the library. It was recommended, I believe, by a columnist in the Buffalo News. In At Nature’s Pace, Logsdon presents his idea for the small family farm as a lifestyle and not merely a career choice. That book talks about the economic viability of small farms—particularly horse farms—arguing that success is, perhaps, more likely on a small scale.

In his recent, and final, book, Letter to a Young Farmer: How to Live Richly without Wealth on the New Garden Farm, Logsdon further develops some of his elegiac essays on the life of a rural farmer with something like an epistolary exhortation to someone who feels irrepressibly drawn to cultivate the earth. This is a collection of essays, with a conversational tone. Just the sort of tone you would expect if you stopped by to visit your aging curmudgeonly neighbor for a few minutes while leaning on his split rail fence. It is, in fact, the sort of book you would expect someone who claims to be a “contrary farmer” to write as a swan song. Logsdon has recently died and this book represents something of a last will and testament for the folks he’s been writing for during the past half century.

Logsdon’s writing style is comfortable and enjoyable to read. He adds a good dose of facts and figures, with a dash of common sense, and a large dollop of opinions. The mixture that results enables the reader to politely disagree at points while still enjoying the experience and getting some helpful information along the way.

Letter to a Young Farmer is not an extended argument, but a series of discussions that surround a cogent theme. This makes the book an easy one to read piecemeal over the course of several weeks or even months. There are essays about managing the politics and economics of a farmer’s market, about the uses and failures of big data, and about the joy of living in one local area for most of one’s life.

The central topic in all of the essays is how to make a go of it as a small farmer. Thus, the subtitle is more descriptive of the content than the title. Logsdon is not writing to the person who inherited a vast tract of land and is putting thousands of acres under plow. Neither is he writing to someone who is necessarily chronologically young. Instead, Logsdon is writing to someone who has decided to engage in agriculture on a small scale—often for the fulfillment of the act itself—who lacks the benefit of his decades of contrarian experience.

Some of Logsdon’s earlier books make is sound like the small farm is the only way to go. This book, however, is more balanced. Logsdon acknowledges that there are many ways to farm and many reasons to farm. Though he still acts as an apologist for the small, “garden” farm, he does not come of a polemical in this book as before. Just persistently contrarian.

Most of the wisdom in Letters to a Young Farmer represents the sort of common sense that seems so uncommon today. He argues that young farmers should avoid debt, diversify assets and income sources, save for the future, avoid social vices like smoking and drinking (they are exorbitantly expensive), minimize eating out and the purchase of non-essentials, build trustworthy relationships with mechanics and other service providers, live in a reasonable house, and so on. These lessons are essential for someone trying to build up a new garden farm, but they are equally useful for those who live in the suburbs—so much of the angst of the modern worker is due to grasping for a lifestyle that has been advertised on television.

The moral of the book, so to speak, is that life is much better when you live within your means and pursue contentment in the place you are. For Logsdon and many of his readers, this translates to finding satisfaction in farming 10, 50, or 200 acres. Often it means being content to do so while working another job, whether full-time or part-time. This is a book that marries up the idea of a sense of vocation with the sense of place.

Even if you aren’t a garden farmer—as I am not—this is an enjoyable book. Logsdon—a lapsed Roman Catholic—is somewhat caustic about the value and durability of Christianity, but if you filter his occasional snide remarks, what you have is a collection of essays that are a pleasure to read on a cold winter evening. The end result may well be a deeper appreciation for where you are, what you do, and perhaps a growing desire to plant a decent sized vegetable garden in your backyard.

Letter to a Young Farmer: How to Live Richly without Wealth on the New Garden Farm

By Gene Logsdon

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NOTE: I received a gratis copy of this volume from the publisher with no expectation of a positive review.

Economics in One Lesson

If I could recommend one book for everyone to read to grasp the connection between economics and public policy, it would be Henry Hazlitt’s volume, Economics in One Lesson. It offers a basic, accessible explanation of why so many attempts to regulate the economy don’t work. Though laws are certainly necessary, the failure of many laws is due to a focus on the legislature’s immediate intentions rather than the long term impact of the proposed policy.

Though the book is not a theology of economics, its main thrust resonates with scriptural principles. The reader does not have to agree with all of Hazlitt’s policy preferences to recognize the value of his long-term view of the universal good and see how they help fulfill authentic justice.

Hazlitt’s One Lesson goes like this:

“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

Basically, Hazlitt’s lesson boils down to two principles: 1) thinking about the long term good instead of the short term good and 2) taking everyone’s good into consideration. Both of these principles resonate with Scripture.

First, let’s look at taking the long view on economic decisions:

Some advocates of so-called social justice, including some Christians, argue that immediate action to change significant economic policies in order to provide a rapid solution to a perceived economic problem is necessary. In many of these cases, however, the long term impacts of the new policies are not fully considered.

Looking for long term consequences instead of focusing on short term effects is biblical.

For example, Proverbs 21:5 states: “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (ESV)

Interpreting Proverbs is a bit tricky since they are not absolute, universal laws, but general truths that may have apparent exceptions. However, without pushing this text beyond its primary meaning, it is clear that long term planning is being lauded by the author of this proverb.

For another example, consider Luke 14:28–30: “ For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’” (ESV)

The context of these verses is about the cost of discipleship, but Jesus is urging his audience to consider the long term costs of their discipleship, not just the apparent immediate benefit. That Christ uses an economic example to illustrate his spiritual point demonstrates the validity of the economic principle.

Second, the concept of the good of all, not just a favored group, should be considered:

Some Christians try to argue that social structures should be preferential toward the poor or others who have real or perceived disadvantages. For example, in the minds of some activists, social justice requires progressive taxation and redistribution of wealth in order to benefit the poor. The rising tide of socialism among the “young and woke” crowd seeks to confiscate and redistribute wealth according to their desired social order, which is intentionally designed to harm the rich (or those that they choose to label as such).

The Bible, on the other hand, indicates that social structures should be oriented toward even-handed justice. Consider Exodus 23:2–3: “You shall not fall in with the many to do evil, nor shall you bear witness in a lawsuit, siding with the many, so as to pervert justice, nor shall you be partial to a poor man in his lawsuit.” (ESV)

The passage then goes on to explain that you can’t passively ignore the good of your enemy by failing to return his lost property (vv. 4–5), that you should not lean toward the benefit of the rich against the poor in seeking justice (v. 6–8), and that the sojourner, the foreigner in your midst, should not be oppressed. Justice is the main theme.

As a second example, consider Proverbs 22:16: “Whoever oppresses the poor to increase his own wealth, or gives to the rich, will only come to poverty.” (ESV)

It is apparent that manipulating social structures for the benefit of a special interest group is not a path for universal justice. This means that creating a system that benefits the rich is bad (and this is a major danger of our current system of crony capitalism), but that attempting to punish the rich through taxation (as socialism tends to do) is also evil.

The basic thrust of these passages is that social systems, including economic systems, should be oriented toward even-handed justice.

Though more could be said about Hazlitt’s One Lesson, I have come to the conclusion that there is warrant for claiming that Hazlitt’s principles resonate with biblical justice. His examples help show why some of the well-intentioned policies proposed by so-called social justice advocates are really detrimental to a holistic system of justice.

It is important, therefore, that we begin to seek a system that does not intentionally harm one group for the benefit of another and that we look at long term consequences, including systemic incentives created by social programs or convoluted tax systems. Only when we begin to ask these important questions will we be able to find legitimate answers to them.