Fetishizing the Peasant

Peasants into Frenchmen is a classic text in a niche field that hits at the very central problem of modernity: how does a nation convert its population from subsistence farmers into modern citizens? This problem is as old as the concept of citizen itself: it is easy to have a collective identity within a city, and urbanites have formed the early core of states since we have had states, and in many cases a dominating city has gone on to found or anchor empires and civilizations. There's a clear urban bent in history, which makes sense given that cities had the wealth and literacy to devote to writing history.

Outside the city, life for most people, throughout most of human history, has been very much the same: live in a village, grow as much as you can, hope the crops don't fail and the taxes aren't too high and that the neighbors don't raid, and then survive to do it all again next year. There is a simplicity to this, a romanticism, that emerges almost exclusively in urbanites at least three generations removed from having to live like this.

It is seemingly without any knowledge of this history and informed by romantic notions filtered through the modern environmental movement that articles like this are written. Subsistence farmers are, in the strictest sense, "locavores," but very rarely are they so by choice. It is, instead, a lifestyle adopted by necessity, or maintained when they are no seen to be no viable alternatives.

Pushing for development away from subsistence farming, maligned here as the specific failing of USAID programs in Afghanistan, has been the whole project of modernization for the last several hundred years. In The Great Transformation, economist Karl Polanyi documents the century of legal changes it took to provoke small-time farmers in England to give up their farms and take jobs elsewhere. The labor-intensive nature of agriculture has traditionally hindered nations in their attempts to pursue any other path of economic development, whether it be the command systems of Soviet Russia and Communist China or market economies of the West. Encouraging development in other directions is not about trying to destroy what is unique in Afghanistan, but is instead about understanding what the term development means.

Money is Tinkerbell

Money, as currently exists, is an entity whose usage is dependent on confidence, and whose value is dependent on interest rates. Interest itself isn't a trait native to money but is dependent upon the agencies responsible for the creation of money itself. In many countries, this is handled by a central bank; The Bank of England, for example, or in Germany the Bundesbank. In the United States, our central bank equivalent is the Federal Reserve, which is frequently attacked for being this shadowy, arbitrary, and impartial conspiracy unto itself. Given the nature of money, I like it for exactly those reasons.

Puzzled? You're not alone. The Nation recently authored a very thorough article discussing how to reform the Federal Reserve for the modern age, and to end the collusion between it and bankers. The article raises many valid points, and I'm still not entirely certain of my opposition to the plan it suggests.

Anyway. Here is my rough contrast between the Fed and Congress as vehicles for Money Generation in this nation.

Congress: explicit money generation (as, notably, stated in the constitution. Article 1, section 8). So what the Fed does (coin money, regulate the value thereof) are congressional powers. The traditional avenue for money expansion (growth through lending) requires that congress borrow money on the Credit of the United States, which itself seems to require a body outside the United States Government. Note: There is nothing here saying congress couldn't set the interest rate or will money into existence. Responsibilities other than money generation: the entire federal budget, as well as tax creation/other sources of federal income. Basically, all that spending that people look upon so unfavorably.

Fed: Somewhat arcane money generation, thanks to it's backroom dealings with bankers and the inherent secrecy of its governing board. Controls interest on the dollar, can release surpluses of money that it wills into existence. There are more steps to the process, but the Fed, as the controller of dollar creation, can spontaneously have $80 billion to distribute into banks. Responsibilities other than money generation: regulation of banks, sort of. Which it has totally failed at. But it still does money generation fine.

On paper, there is no reason congress shouldn't generate money. But since money is confidence-based, and since it's explicit value (interest) is also tied to confidence, I am hesitant to put the money supply directly under congressional control. Congress, as a body, is not terribly confidence inspiring. It's like asking the audience to clap so that Captain Hook can live - it makes just as much sense as clapping for Tinkerbell, but no one likes Captain Hook, and so they'd all just let him die. In that sense, I think, the Fed does wonders. By playing an abstract role at a distance from the rest of government, it gets to appear weird and fickle and impartial. While it's more vulnerable today than it has been at almost any point since existence, the dollar is not being questioned. It is, as arbitrary currencies go, okay. What usually happens with massive injections of newly made money is hyperinflation, as prices go up and dollars become worth less. Right now, it looks like the dollar is deflating. As the fed injects new money, money is actually becoming more valuable. Even though we can see it being conjured into existence. It's strange, and I attribute it to the very obtuseness and arcane workings of the Fed.

This doesn't mean that the Fed is flawless, or that money is itself worthless. But because the value of money is largely dependent upon people thinking it has value, there is something to be said for money generation to be a detached, almost magical process. You've got to convince people to clap, and we'll keep doing it for Tinkerbell.

Voting in the Age of the Internet

From both BoingBoing and Nora comes this great post: How to Get the Nerd Vote.

My favorite part?

2. Universal Healthcare. Everyone I know that freelances or works a day job and wishes they could quit and follow their dreams of launching a company complains about the lack of healthcare. Whenever I used to talk about freelancing at tech conferences, the first question was always about healthcare coverage. I've heard that in places like Berlin where you don't have to worry about where your healthcare is coming from or how much it costs, up to 35% of working age adults are freelancers. It may sound crazy and anti-capitalist to consider healthcare for all, but if we flipped a switch tomorrow and everyone had health coverage I swear a million small businesses would launch overnight. I know lots of people that keep a job just to get healthcare that are wasting their creative talents because they had a cancer scare or were born with a defect or otherwise are deemed uninsurable on their own.

It's nice to see an argument for universal healthcare that isn't "moral obligation" but is instead "economic boon".

Micro-Blog Roundup: Wall Street Time!

Recently four of my favorite Albuquerque-based blogs posted commentaries on the wall street crash.

iMinister: Calling the treasury secretary on his shit

Kittens for Jesus: Evan looks through the actual legislation and unmasks lovecraftian horrors! Fortunately, he has a partisan picture with which to cheer partisans.

Burque Babble: Scot Key is snarky. What, you expected something else? The snark is, as always, premium grade.

Jfleck: John puts it all in perspective, and as added bonus, he does it by quoting the Secretary General of the UN

Enjoy! I'd throw my own opinion around, but I'm just hoping that we don't have another repeat of crash/decade long depression/world war.

Economics Question

Today in microeconomics, my teacher said "economics can be extraordinarily unfair, but it is remarkably efficient." She followed this by saying that many government programs "aimed at creating fairness, by necessity, create inefficiency".

So, my readers, all twelve of you - Are economic efficiency and fairness necessarily opposed? Are they opposite ends of the same spectrum?

Your thoughts in the comments section, please. I'm intrigued to get other minds looking at this.

The General Good

BoingBoing has a fantastic excerpt of a fantastic article. The article addresses the old saw that

"corporate officers have a fiduciary duty to maximize shareholder value."

This is a particularly troubling maxim for a person who loves the functionality of economics but hates the way it sees self interest as separate from general interest. Go read at least the excerpt if not the whole thing. It's a very well-reasoned post, and while it does come close to a Godwin's at the very end, we are in interesting times. As an example, telecom immunity and FISA both brought up relevant and valuable analogies to "acting under orders" and "best interest of the company versus best interest of citizens". I think these are times that will call for a rethinking of the purpose of economics, and a rethinking that diverges from "how shall government best affect the economy for the public good" to "how shall companies themselves act in a way that best serves the public good".

I've a hunch that a year down the line I'll be referencing this piece an awful lot.