Change? Yes, we can!

Over the past week, I’ve spent a considerable amount of time “brooding” over the amount of debt the American people have accrued, both the nationally but also the privately held debt. It is almost as if I can literally feel that debt weighing down on me as well as on many other people. I even began by writing this very blog entry dedicated to putting together a lot of exact numbers–back in high school I was fairly good at math, maybe that’s why I liked the idea–but then I realized: it is actually relatively unimportant how large the debt exactly is. What matters is the effect that “being so deeply in debt” has on people. For the most part, I would say that being in debt comes with a feeling of “not being able to afford something I usually would want to get and could pay for”. And sometimes the things people cannot afford to buy can be very important things… But being as deep in debt as we are at the moment probably comes more with the feeling of being “owned” by whoever I am indebted to.

Naturally, there are still quite a few Americans who do not yet personally suffer from the effects of either the national debt or their personal debt, should they have some. At least the way in which they suffer is probably very subtle, almost invisible even, and has not yet reached levels that affect their day-to-day activities let alone their ability to buy enough food to live off. But there are yet ways in which this kind of indebtedness affects everybody: by reducing our freedom in a considerable way, slowly eroding it. My assumption is that, if the amount of debt keeps increasing, the American People will, in the end, be “enslaved” by policy decisions made solely based on fiscal arguments. Even in the current presidential race, few people seem to ask the question whether or not any of the budget items for which candidates suggest cuts are useful or essential. The fact that “we need to save money” seems like all that matters. And another aspect is that not only those people with little money and potentially monetary debt will be enslaved, but also those with considerable wealth will be enslaved to follow “the rules” the financial markets dictate.

I’m now trying to step back from any concrete problems and instead attempt to describe the intersection of the society and economy I live in as I see it… It seems a fair assessment that, based on the division of labor and the highly specialized processes required to produce many if not most of the goods we have grown used to, we simply need a way of ensuring that the wealth that is being produced by the people through some form of work is, somehow, distributed. And I want to make it clear that I do not refer to wealth only as physically graspable goods, such as food, clothing, or cars, but also other accomplishments that increase our general quality of life and welfare, like education, public safety, and the rule of law! On the other hand, I sometimes have very strong doubts that some of the services provided by parts of the financial industry can ever be described as “generating wealth” of any kind, at least not when it comes to “commonwealth”, which is just a translation of the word republic!

Over time, the pre-dominant way that developed to determine the distribution of goods and services, in general, is based on a token-based, free-market economy. In such an economy, goods and services are “swapped” for currency based on a price that is, at least in theory, determined by supply and demand, which then automatically provides each individual participant of the economy with the greatest value, hence maximizing the overall wealth. For one, it ensures that goods of “lesser value” with the same requirements for resource use are, over time, removed from the market place. Importantly, the reason this system is chosen by the government, the democratically elected representatives of a republic, is not to benefit the few and allow individuals to get rich, but rather so as to generate the greatest benefit for society as a whole! It is also important to take into account that if the profit margin of anyone providing services, such as in case of education, or producing goods, such as in assembling cars, becomes too great, the price should be considered too high, such that the general population certainly does not get the “greatest value” in return…

As far as I can see, this description does not contain any information on how the required currency is provided, nor does it give any detailed rules as to how some of the less individual but rather society-based desires can be satisfied. And at this point I would like to describe my most recent thoughts based on a few observations:

In almost all market-based economies, the idea of having a central bank, which is as far as possible from government influence, that provides the currency seems being considered as without alternative. To the extent to which I understand economics, this is however by far not a proven fact, but rather it is the currently favored, and thus accepted, hypothesis or model. While some past occurrences have indeed shown that by simply giving the right to create money to the executive branch of government can lead to disaster, I don’t think that any proof has been presented that would allow to draw the conclusion of the opposite, namely that putting money creation into the hands of privately run banks is necessarily “in the interest of the people or society”. And given that this privilege of creating money seems to come with at least “some power”, I must admit I am quite surprised that the Supreme Court of the United States hasn’t yet found that allowing private banks to “create money” is unconstitutional.

In addition to the idea that a central bank is organizing the monetary supply, the idea that interest has to be paid for a loan seems equally without alternative. And what’s more, in the current flavor of monetary lending practices, the interest is not only paid on the original loan, the principal, but on all subsequently accrued interest-based debt, that is to say compound interest, in other words a possibly exponential growth of debt. Funny enough, I would at least see several ways in which the currently existing system could be “extended”. I’m not necessarily saying that each of my thoughts would be an improvement, but to say that “things have to be the way they are” simply seems to easy. For one, Congress could set rules prohibiting extremely high interest rates beyond, say, 10 per cent. And in cases were such interest rates yet seem reasonable, such as where the risk for the borrower is indeed very great, legal provisions could enforce that interest rates have to decline over time automatically and that compound interest is only legal for very low interest rates. In other words: if my history demonstrates a high risk of me being a potentially defaulting loan recipient, I might initially have to pay a high interest rate, say 25%, but once I have made regular interest payments over a certain period of time, the interest rate either would have to be lowered substantially or, alternatively, any interest that was not paid will not be added to the amount on which I have to pay that interest rate, as this amount was not part of the initial risk of the borrower anyway. And finally, if someone giving out a loan makes some profit with receiving interest, I find it not only fair but essential that this person than also truly carries the risk in the case of a default on the loan.

Why do I see those issues as problematic to begin with? Well, starting with the second area that is not covered by the description of a free-market society, I would argue that there are many desires which a society might express as a whole rather than individually. For instance, in the United States some of these desires are put expressly into the Declaration of Independence:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

I would argue that, naturally, the pursuit of happiness is certainly something every individual has, but on the other hand it might not be necessarily true that each individual wants to guarantee this for every other individual equally, which is why it was made something government shall try to achieve. In a way, this principle is somewhat contrary to the idea of some of the elements in our very economy insofar as competition, in the sense in which it is used in sports like the Olympics, requires equal chances and footing. Obviously if someone owns a lot of capital, mostly in form of currency liquidity, that person does not have to “struggle” as hard as someone else if they wish to pursue their happiness–or pursue anything else for that matter, so how can that be considered fair competition. Furthermore, it seems to me that while none of the people heading the “too big to fail banks” has been elected by “The People”, banks and other financial firms are beginning to exercise a great amount of influence over political decisions, to the point where I would question to what extent the actual government is still “in power”–and if that were not the case it would almost seem like a constitutional duty to attempt to abolish any form of government that has not been given the consent of the governed.

Now, please, don’t get me wrong. I’m not a fan of socialism or another kind of systems that wishes to simply “equalize” monetary means among participants of a given economy. But the idea that some participants of our economic system can consume goods and services in pursuit of their happiness simply by owning “excess capital” and living off interest payments made by others who require some of this excess capital to be able to participate in the economy at all seems not only strange but outright dangerously close to violating some of the principles the Founding Fathers wanted to see granted for every person living in the United States. The King of England was considered overbearing at the time, and in my mind at least the financial industry is playing an every more important role in how our daily lives are shaped.

As part of living in a society that, I would hope, is a civil society with a basis in the ideas of some of the greatest philosophers, my vision is that each and every member of society should participate on both sides: giving and taking. And the giving should not be limited to having one’s money “do the work”–which is a true misnomer in my opinion: money cannot work, it can simply be used to suck up someone else’s contribution to society in form of interest payments…

Do I see any hope? Well, yes, of course! But the vision I have would require people to give up quite a bit on the idea of “owning” an entitlement that is counted in forms of a dollar amount, at least when it comes to amounts that, by far, exceed what they could ever spend on regular consumption goods in the foreseeable future. So long as someone has the ability to “conserve” effort that was put into the economic system for very long periods, and pile up this conserved effort to ever higher mountains, the system will always carry an incalculable risk of failure. In that sense, I actually believe that re-designing some of the government-run programs, like Medicaid and Medicare, into a system that, within reasonable contraints, promises to pay for people’s basic needs and medical expenses when their insurance doesn’t cover for it or they simply don’t have an insurance, but that doesn’t do so in form of expressly stating dollar amounts is a necessary step to fix things. More generally, holders of U.S. Treasury Bonds would have to give up at least part of their entitlement, which next to Medicare and Medicaid also includes debt held by retirement funds, private investors, and investment firms.

But another big contribution that has to be made is that banks need to return to an actually useful business model: that of providing required services to society, not a way of providing the people working at banks with the means to get rich for their own sake, which then is rather a disservice to society. Financial capital is meant to serve the people, not the other way around…

Do I blame anyone involved? Not at all. If anything, I would say that the mantra of “if I just had a little more money, I’d be so much happier” works a bit like a virus. Once it infects our minds it almost is like taking over control of our lives. Involuntarily I am reminded of a movie from the 80s: They Live. A zombie-like world where many people have been brain-washed and are no longer seeking true happiness in their lives. And just as in the movie, at the very end, no-one in our society, not even someone who seemingly benefits from this way of organizing our economy, truly wins. Maybe we should step back a little from the numbers and think about what we, as a society, want our lives to look like, and what our government’s functions are supposed to be and then find ways for us to strive towards that goal and our government to fulfill those functions.

Would I do better with an editor?

Maybe you’re thinking: well, now Jochen must have lost it… I mean, at first, this question does seem a little like I am taking myself way too seriously here, right? It’s “just a blog”, it’s not a professional project, and so what the heck would I need an editor for anyway.

Well, yesterday I had two experiences that at least made me think there are benefits to having an editor. One was a long conversation I had with Marck, my boyfriend of more than three years now, in which he pointed out how, each time I had blogged in the middle of the night, literally burning my midnight oil, I might have been putting less scrutiny into my thoughts and, inadvertently of course, could have written something I wouldn’t have under other circumstances. And while I assured him that I have made it a rule to reread each and every blog post at least twice, in full, before hitting the little “Publish” button that WordPress offers, I cannot make the claim that I would never write something, particularly if it is written in “the heat of the moment”, that I might put differently at another time or in another mindset. The fact that typos and some other flaws remain is proof enough for me that I’m not perfect!

The second experience was that shortly after publishing my previous post about how accepting one’s mortality might be beneficial for the quality of our lives, a somewhat nagging feeling overcame me, and I wanted to “double-check” with Hedy Kober, the lead author of the soon-to-be-published study I am mentioning, whether I had overstepped any limits. And while I felt fairly confident, at the time of writing the blog post, that I hadn’t, I also couldn’t shake off the feeling that maybe I still had…

So that, in short, is why I think an editor might be beneficial: to provide a reality check on my assessment of values, and to work as a sounding board for my, uhm, admittedly present vanity, assuming that is the right term to describe my predicament. And I sincerely hope that I am only suffering from a relatively mild and harmless amount of it…

And again you might think: “What on earth is he talking about??”

Yeah, well, I think it is a confession which I must make sooner or later anyway… You see, as much as I can say that I enjoy a philosophical debate (which I do!), there is also a small but significant part of me that felt and feels having those debates in private with friends wasn’t and isn’t quite enough. This part “inspired” me to register this domain name and, in a way, has “driven” me to posting more or less regularly since this blog’s inception less than two weeks ago. Is it something I have a problem with? Not yet, or at least I hope so. And neither I hope is it a problem for my readers. But…

A couple of days ago I read a Facebook post in which a friend and former colleague of mine mentioned an article in Slate Magazine covering “Jonah Lehrer’s Journalistic Misdeeds at Wired.com”. So far I haven’t yet “self-plagiarized” my blog posts, at least to the best of my knowledge. I have just been hacking away at the keyboard every time I post, not using some sort of copy-and-pasting, with the exception of the Facebook comment I paraphrased for my post the other day–something I expressly noted there. But I think that every “misdeed” is, to some extent, a misjudgment in values and in some kind of moral code that people who want their published works to be taken seriously better adhere to.

The deeper issue this very article’s author, Charles Seife, raises is that people reading any kind of material that is published have an expectation about what they’re consuming. In the case of Jonah Lehrer, Seife argues that people had the reasonable expectation that every time a new article was written by Lehrer, each of these articles had to be “brand new”, at least to a great extent, and not simply “recycled” from prior work. As to whether or not that is a reasonable expectation and assumption, I must admit that I have a somewhat more nuanced opinion about.

Equally as in music, I believe that creative work always is a recombination of already existing material. To what extent this should be achievable by merely paraphrasing, if not copying parts of existing work–written by the same author previously, mind!–I cannot say, but at least in the realm of music remixes are among the most popular works published. And I tend to agree with wikipedia’s quote of Mr. Lehrer’s publisher, hoping the quote is correct, as I currently don’t feel like putting in an hour of “fact checking”, that you shouldn’t have to ask for permission to reuse your own works, and that Mr. Lehrer simply didn’t correctly state whenever he did so. Next to the re-use of his own material, there are claims of fabrication and misrepresentation of quotes and facts, which is something entirely different, and I currently don’t want to comment on, as I know by far too little about the whole background or Mr. Lehrer’s writing in general…

The initial question I had, however, remains interesting to me. Why? Well, as much as this blog is not a professional project–quoting from my very first post: “Given that I lack (complete and/or certified) academic, scientific training, I would never consider myself aprofessional philosopher“–I want my readers to enjoy consuming this blog and, while I prefer not to think of life as trying to meet expectations, I still want to allow readers to have at least some reasonable expectations about it. In that sense, I might at best approach this issue by asking: are their any “standards” I want my blog to meet?

Essentially I want to present my thoughts and opinions, as truthfully as possible, in a way that is, if anyhow achievable, entertaining but at the same time not at the expense of others. In short, I generally feel very opposed to the idea of inflicting pain or serious harm, which leads me back to my original conclusion: having an editor might very well work as a kind of sounding board. I try, very hard, to look at what I’m writing from different perspectives–does what I have written have the potential to cause pain?

Under certain circumstances, it seems inevitable to cause pain if I want to express my thoughts truthfully. Someone reading my blog might, for instance, already be “hurt” by encountering a thought that contradicts a vital aspect of this person’s worldview or way of life, such as in my post about abortion after rape. I would still feel saddened but, again, not sorry. Still I want to extend every effort possible to avoid publishing thoughts that, if I were to put myself into the position of someone not sharing my views, were construable as a personal insult or as hurting someone on purpose.

Equally, I want to and when it comes to my work as a research assistant at Columbia am even legally required to ensure that I do not publish anything that can be considered as a breach of confidentiality. When friends are concerned, I do not wish for them to feel less inclined to share their views with me in private because they fear being named in my next blog post. And equally I want the people I work for and with to have the faith that I will not publish anything that would affect their work or reputation negatively in any way.

How will I go about this practically? Well, I am not sure whether I can find someone willing to be an actual “editor”, someone who wants to perform the probably tedious and not necessarily altogether enjoyable task of having to “fact-check”, or rather “value-check” my posts. In case you are among the people I trust and feel inclined to apply for the “job”, let me know! In the meantime, I will send new posts to a small number of friends, probably two or three at most, and wait… If I hear back from them with comments, I at least know where to put some more effort into. And if I do not hear back from them, I will have to concede to rereading the post, after cooling down a little from that “heat of the moment”. Hopefully that can improve the quality and enjoyability of my posts. As always, comments are welcome!