Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Sunday, November 11, 2012

Being Consumed–Consumerism

The following are excerpts from the second chapter, “Detachment and Attachment”, of Being Consumed: Economics and Christian Desire by William T. Cavanaugh. This chapter is a critique of the modern consumer culture and the ways in which it is at odds with biblical teachings. The chapter concludes with suggestions on how Christianity should approach the “things” of this world.

The first chapter excerpts can be found in this earlier blog entry.


“What really characterizes consumer culture is not attachment to things but detachment. People do not hoard money; they spend it. People do not cling to things; they discard them and buy other things.”

“In a consumer society, detachment occurs in both selling and buying, and anything can be sold: healthcare, space, human blood, names (‘Tostitos Fiesta Bowl’), adoption rights, water, genetic codes, the rights to emit pollutants into the air, the use of one’s own forehead.”

“Consumerism is not so much about having more as it is about having something else; that’s why it is not simply buying but shopping that is the heart of consumerism.”

“Consumerism is an important subject for theology because it is a spiritual discipline, a way of looking at the world around us that is deeply formative. In many ways, consumerism has affinities with the traditional Christian views of how we should regard material things. We will need to explore where consumerism and Christianity converge and where they party ways.”

“For many people, consumerism is a type of spirituality, even if they do not recognize it as such. It is a way of pursuing meaning and identity, a way of connecting with other people.”

“The problem is a much larger one: changes in the economy and society in general have detached us from material production, producers, and even the products we buy.”

“There is no need to romanticize preindustrial society. But the difference in our attitudes toward material things can hardly be overemphasized. We used to make things; now we buy them.”

“Not only do we not make the things we use; more and more, we don’t make any things at all. Why should we care? Perhaps because it has something to do with widespread negative attitudes toward work in our society.”

“In a reversal of Genesis, ‘man is treated as an instrument of production, whereas he … ought to be treated as the effective subject of work and its true maker and creator.’ The people who make our things are referred to as ‘labor costs,’ which naturally need to be ‘minimized.’ And one of the key ways to reduce labor costs is to move production overseas, where wages are much lower and protections for workers are much more lax.”

“Naomi Klein argues that the goal of a transnational corporation is a kind of transcendence of the material world. Such a corporation

attempt[s] to free itself from the corporeal world of commodities, manufacturing and products to exist on another plane. Anyone can manufacture a product, they reason … Such menial tasks, therefore, can and should be farmed out to contractors and subcontractors whose only concern is filling the order on time and under budget … Headquarters, meanwhile, is free to focus on the real business at hand – creating a corporate mythology powerful enough to infuse meaning into these raw objects just by signing its name …

After establishing the ‘soul’ of their corporations, the superbrand companies have gone on to rid themselves of their cumbersome bodies, and there is nothing that seems more cumbersome, more loathsomely corporeal, than the factories that produce their products.”

“Most of us would never deliberately choose our own material comfort over the life of another person. Most of us do not consciously choose to work others to death for the sake of lower prices on the things we buy. But we participate in such an economy because we are detached from the producers, the people who actually make our things.”

“Globalization has increased our awareness of, and sympathy for, other times and places. At the same time, however, it produces a detachment from all times and places… Because our consumption can take us anywhere, we are nowhere in particular.”

“This detachment tends to characterize our attitudes toward the products we buy. Far from obsessively clinging to our stuff, we tend to buy and discard products easily… The products we buy are mute as to their origins, and the people we buy them from can tell us little. Products say nothing about where they come from and how they are produced, and we scarcely bother to wonder.”

“This does not mean that we have become indifferent to the products we buy. On the contrary, as human relationships fall away from the process of buying products, relationships become more direct between ourselves and our things… Marketers know that consumption could never keep pace with production if encounters with products were encounters with inert things. The product must be made to sing and dance and enter a new kind of relationship between itself and the consumer. Over the course of the twentieth century, marketing moved from primarily offering information about a product to associating certain feelings with a product… ‘Branding’ – that is, getting people to identify with a particular corporate brand – is about creating relationship between people and things.”

“Such relationships [between people and products] are not made to last. There would not be a market for all the goods that are produced in an industrialized economy if consumers were content with the things they bought… The economy as it is currently structured would grind to a halt if we ever looked at our stuff and simply declared, ‘It is enough. I am happy with what I have.’”

“the truth is, however, that we do not tend to experience dissatisfaction as merely a negative. In consumer culture, dissatisfaction and satisfaction cease to be opposites, for pleasure is not so much in the possession of things as in their pursuit.”

“Consumer culture is one of the most powerful systems of formation in the contemporary world, arguably more powerful than Christianity. While a Christian may spend an hour a week in church, she may spend twenty-five hours per week watching television, to say nothing of the hours spent on the Internet, listening to the radio, shopping, looking at junk mail and other advertisements.”

“Such a powerful formative system is not morally neutral: it trains us to see the world in certain ways. As all the great faiths of the world have attested, how we relate to the material world is a spiritual discipline… ‘Corporate branding is really about worldwide beliefs management.’”

“Consumerism has certain affinities with the great faith traditions of the world because, as we have seen it, it trains us to transcend the material world.”

“[Things] are not ends but means toward the enjoyment of God. According to Augustine, created things are to be used, but only God is to be enjoyed.”

“The restlessness of consumerism causes us constantly to seek new material objects. For Augustine, on the other hand, the solution to out dissatisfaction is not the continuous search for new things but a turn toward the only One who can truly satisfy our desires.”

“Consumerism is a spiritual discipline that, like other spiritual practices, lends itself to a certain practice of community.”

“Consumerism allows us to identify with other places and other cultures through our purchases… [These identifications only offer virtual solidarity.] The virtual becomes a substitute for concrete political solidarity, or to put it another way, a fundamentally different act – consumption – is substituted for political action. In the Christian tradition, by contrast, one’s attitude toward material goods is closely tied to an imperative of concrete solidarity with others. When the rich young man approaches Jesus and asks what he must do to attain eternal life, Jesus says to him, ‘Go, sell your possessions, and give the money to the poor…’ For Jesus, detachment from material goods went hand in hand with attachment to Jesus himself…”

“According to Aquinas, humans have dominion over material things only ‘as regards their use.’ In other words, this is God’s world, and we are just using it for the time being. Any dominion we have over creation is given to human beings in common by God… We may posses property, but use it only for the common good, especially for the sake of the neediest among us.”

“In the Christian tradition, detachment from material goods means using them as a means to a greater end, and the greater end is greater attachment to God and to our fellow human beings… Consumerism supports an essentially individualistic view of the human person, in which each consumer is a sovereign chooser. In the Christian tradition, the use of material things is meant to be a common use, for the sake of a larger body of people… Paul says, the members of the body who seem weakest are the most indispensable… The poor and the needy are not just objects for individual charity; rather, they are indispensable because they are part of our very body.”

“There is no question about whether or not to be a consumer. Everyone must consume to live. The question concerns what kinds of practices of consumption are conducive to an abundant life for all.”

“In the Eucharist, Jesus offers his body and blood to be consumed.

Jesus said to them, ‘I am the bread of life. Whoever comes to me will never be hungry’ (John 6:35).

The insatiability of human desire is absorbed by the abundance of God’s grace in the consumption of Jesus’ body an blood.”

“It would be easy enough to assimilate the consumption of the Eucharist into a consumerist kind of spirituality. The presence of Jesus could become another kind of commodity to be appropriated for the benefit of the individual user. Indeed, much of what passes for Christianity in our culture today is addressed to fulfilling the spiritual needs of individual consumers of religion… The practice of the Eucharist is resistant to such appropriation, however, because the consumer of the Eucharist is taken up into a larger body, the body of Christ. The individual consumer of the Eucharist does not simply take Christ into herself, but is taken up into Christ.”

“The act of consumption is thereby turned inside out: instead of simply consuming the body of Christ, we are consumed by it… In the Christian view, we do not simply stand apart, as individuals, from the rest of creation…”

“If we remain satisfied with the unity of our own communities, however, we have not fully grasped the nature of the Eucharist. For becoming the body of Christ also entails that we must become food for others. And this often involves moving beyond our own communities and comfort zones.”

“If we are identified with Christ, who identifies himself with the suffering of all [c.f., Matthew 25:31-46], then what is called for is more than just charity. The very distinction between what is mine and what is yours breaks down in the body of Christ. We are not to consider ourselves as absolute owners of our stuff, who then occasionally graciously bestow charity on the less fortunate.”

“Our temptation is to spiritualize all this talk of union, to make our connection to the hungry a sentimental act of imaginative sympathy. We could then imagine that we are already in communion with those who lack food, whether or not we actually meet their physical needs. We might even wish to tell ourselves that our purchases of consumer goods do in fact feed others – by creating jobs. But we have no way of knowing if such jobs create dignity or merely take advantage of others’ desperation…”

“Things are not ends in themselves; they are means to greater attachment to others. We are not to cling to our things, but to use them for the sake of the common good.”

“A sacramental view of the world sees all things as part of God’s good creation, potential signs of the glory of God; things become less disposable, more filled with meaning. At the same time, a sacramental view sees things only as signs whose meaning is only completely fulfilled if they promote the good of communion with God and with other people.”

Tuesday, October 09, 2012

Being Consumed–The “Free Market”

The following are excerpts from the first chapter, “Freedom and Unfreedom”, of Being Consumed: Economics and Christian Desire by William T. Cavanaugh. In this chapter, the current state and practices of capitalism and the free-market are critiqued, and a more appropriate approach to the free-market, informed by Christian theology, are suggested.


“There is no point to either blessing or damning the ‘free market’ as such. What is required is a substantive account of the end of earthly life and creation so that we may enter into particular judgments of what kinds of exchanges are free and what kinds are not.”

“A market is free if people can satisfy their wants without harming others…”

“Augustine’s view of freedom is more complex: freedom is not simply a negative freedom from, but a freedom for, a capacity to achieve certain worthwhile goals. All of these goals are taken up into the one overriding telos of human life, the return to God.”

“Freedom is something received, not merely exercised. Therefore, in order to determine whether a person is acting freely, we need to know much more than whether or not that person is acting on his or her desires without the interference of others. In Augustine’s view, others are in fact crucial to one’s freedom.”

“… There are true desires and false desires, and we need a telos to tell the difference between them.”

“The key to true freedom is not just following whatever desires we happen to have, but cultivating the right desires.”

“… Augustine’s broader point about the relationship of desire to ends is valid, and it goes to the heart of our discussion of the freedom of the free market. The point is this: the absence of external force is not sufficient to determine the freedom of any particular exchange. In order to judge whether or not an exchange is free, one must know whether or not the will is moved toward a good end… Where there are not objectively desirable ends, and the individual is told to choose his or her own ends, then choice itself becomes the only thing that is inherently good. When there is a recession, we are told to buy things to get the economy moving; what we buy makes no difference. All desires, good and bad, melt into the one overriding imperative to consume, and we all stand under the one sacred canopy of consumption for its own sake.”

“To desire with no good other than desire itself is to desire arbitrarily. To desire with no telos, no connection to the objective end of desire, is to desire nothing and to become nothing.”

“The problem with the ‘free-market’ view is that it assumes that the abolition of objective goods provides the conditions for the individual will to function more or less autonomously. The reality, however, is quite different. For, as Augustine sees clearly, the absence of objective goods does not free the individual, but leaves him or her subject to the arbitrary competition of wills. In other words, in the absence of a substantive account of the good, all that remains is sheer arbitrary power, one will against another. This is what Augustine calls the libido dominandi, the lust for power with which Pharaoh was possessed.”

“In the absence of any objective concept of the good, sheer power remains.”

“[Business defending increasing disparity between executive and employee pay.] In other words, it it considered good business practice to maximize the disparity of power between employer and employee in order to increase the profit margin of the corporation. All of this is done in the name of ‘free’ trade. As Augustine saw, in the absence of any substantive ends, what triumphs is the sheer lust for power.”

“When they [businesses] blame the move [off-shoring of labor] on necessity, they recognize a very real sense that the ‘free’ market does not leave them free to act in ways that they might believe are more just.”

“Considerations of goodness and justice only seem to apply to the [theoretical] capitalist system as a whole. Friedman and other free-market advocates argue that capitalism as such is the best system based on its ability to give people what they want. A system that is allegedly based on individual rights is thus ironically justified by a utilitarian justification of the system as a whole, to which individuals and their freedom are sacrificed.”

“However, in order to judge which exchanges are truly free and which ones are not, one must abandon Friedman’s purely negative and functionalist approach to freedom and have some positive standard by which to judge… Once we admit that freedom defined strictly negatively is inadequate, we are pushing ourselves toward the recognition that Augustine was right; to speak of freedom in any realistic and full sense is necessarily to engage the question of the true ends of human life. Yet such ends are precisely what free market advocates would banish from the definition of the free market. To enter into judgments about the freedom of particular exchanges, we must abandon Friedman’s definition of a free market, and we must also abandon any claims for the goodness of ‘the free market’ as such. There is no point to claiming that ‘capitalism produces freedom’ unless one wants to claim that ‘any economic exchange that produces freedom is capitalism,’ in which case one has simply uttered a tautology.”

“There is simply no way to talk about a really free economy without entering into particular judgments about what kinds of exchange are conducive to the flourishing of life on earth and what kinds are not… From a Christian point of view, the churches should take an active role in fostering economic practices that are consonant with the true ends of creation. This requires promoting economic practices that maintain close connections among capital, labor, and communities, so that real communal discernment of the good can take place. Those are the spaces in which true freedom can flourish.”

Thursday, May 10, 2012

It’s not that simple

Question: Are Americans drowning in debt?

A simple question. There ought to be data from which a simple “yes” or “no” can be concluded.

Doing a Web search brings up any number of pages that attempt to answer this question. Most seem to be “yes” and rely on nearly identical data. But is it so simple?

The most frequently seen chart looks something like this1:

[Chart 1]

Looking at this it might appear that indeed, Americans are drowning in debt and are in trouble. There is a significant increase in the rate of rise of the debt ratio between the 1980’s and 2007, whereas the ratio remained fairly steady between 1964 and the 1980’s.

The problem with the above chart is that although accurate, it is incomplete. The Federal Reserve Bank of San Francisco provides a document with a more complete chart.2

[Chart 2]

What this chart brings in are assets: personal income, real estate, and securities. We can see from this chart that even as debt has increased, assets have also increased. Is this good or bad?

First, part of basic economic theory is that debt is required in order for the economy to grow. There is no incentive for saving or investing if there is no return on it. For there to be return on savings and investing (both are essentially the same) the assets saved and invested must be loaned out. Through the process of debt, the original assets invested are increased.

For a household we need to include in the ROI (return on investment) not just liquid assets (from savings and investing in stocks), but also intangibles such as future earnings power (borrowing for education would fall here), future ability to have a roof over one’s head (mortgage on primary residence), ability to transport one’s self to work (auto loans), and recreational enjoyment to extend the ability to continue working (loan on vacation home). This is leverage, the ability to use one’s assets as collateral to increase their assets, both tangible and intangible.

Not all debt is bad. In fact as I hope I’ve briefly demonstrated, many debts can be good. The problem is when a person or household is overleveraged to the point they are unable to meet their debt commitments. The first chart (debt to income ratio) might imply that is the case, and much commentary on this chart concludes as such. But not all agree.3

My argument is the first chart, although informative and provides tangential data toward leverage, cannot answer by itself whether or not American households are in trouble.

This third chart plots data published by the Federal Reserve.4

image
[Chart 3]

This shows the most pertinent data to answer whether or not American’s are drowning in debt. This chart shows how much of personal disposable income is going towards servicing debt. The first chart shows the growth of leverage; this third chart shows the ability to pay for the leverage.

What this shows is that the Debt Service Ratio for all Americans is today as low as it was in the early 1990’s. The same can be said of most of the Financial Obligation Ratios that are plotted. The trend peaked around 2007 but has since been declining. According to this chart then, the answer to “are American’s drowning in debt” is “No.” Americans are well within their means to meet their ongoing debt commitments.

My answer to the original question is a qualified “No” and “Yes.” Americans are not in immediate trouble; they are not “drowning in debt” as some alarmist headlines might have you believe. At the same time the increasing rise of leverage is a concern. If the underlying assets – real estate, securities, one’s ability to earn income – is reduced, the ability to service debts will be affected adversely. If severe enough, then yes, Americans could drown in debt.

A simple question; but the answer? It’s not that simple.


References:

  1. http://www.moneyreallymatters.com/content/debt-to-income-ratio-and-us-household-debt/
  2. http://www.frbsf.org/publications/economics/letter/2009/el2009-16.html
  3. http://economistsview.typepad.com/economistsview/2012/02/the-increase-in-household-debt-prior-to-the-crisis-is-not-a-moral-issue.html
  4. http://www.federalreserve.gov/releases/housedebt/