Re: EOpriv: OWNERSHIP: Aggregates and Ownership

[John Médaille <john@medaille.com>]

At 04:03 PM 9/24/2002 +0000, Don Ward wrote:

>John: On aggregates and ownership. I have a son who while not an economist 
>has that degree from the Air Force Academy. He emailed your note to his 
>former academy advisor who has a PHD in economics, left the academy for a 
>liberal arts college as a professor of economics and has now returned to 
>the academy as a civilian professor. The fellow is very bright and may 
>shed some insights on your questions.I am a retired businessman who 
>studied economics 50 years ago. My sons training ended in 1989. Since then 
>he has been a figher and now airlines pilot.We both sense that you might 
>be trying to find  a model using a combination of economics and a social 
>consience. They might be unrelated and such a model may  not exist. We 
>both do  believe though that there is a crossover point where even a free 
>market economist would cheer Keynes. That is the point at which enough 
>wealth is shared, created by pump priming or whatever, so that there there 
>is a level ! of  consumer  purchasing power in the economy to sustain a 
>GNP. level or grow it.   Services provided by government, to the extent 
>that the taxes to support them,  do not exceed the cost of purchase on the 
>open market - frees up resources to create other purchasing 
>power.  Another is lower taxes and rebates.Another is to  is to pay higher 
>wages. Another subjective element is an employment level to create 
>consumer confidence. It could be based on a free market or as I saw in the 
>old Soviet Union an inefficient ( in my businees terms) planned economy 
>with "full" employment.

Don,

Thank you very much for your comments. I hope Air Force can come to the 
rescue here; certainly somebody has studied this issue and some material 
must be available. However, It is not that I am trying to find a 
combination of economics and conscience, but I am asserting that one always 
exists, namely, the income distribution curve. This curve is always, 
willy-nilly, society's concept of distributive justice in a form that all 
may read. The real question is whether one particular curve, which is to 
say, one particular idea of justice, is more "practical" than the others. 
Can we read, in the numbers that make up the history of economics, a curve 
that seems to betoken a better and more stable business environment than 
others? Can we see changes in this curve that correlate to downturns or 
upturns? And can we read, in the economic history of other nations, whether 
extremes of wealth and poverty bode well or ill for business, or whether 
more equal distributions have any impact on the health of a nation from a 
purely business perspective? If this is not the case, that is, if economies 
can be described in terms of aggregates without regard to distributions, 
then we must conclude that economics has no relation to justice; if, 
however, we see correlations, then justice cannot be ignored on as a matter 
of purely "practical" economics.

If, as I think, that different distributions describe totally different 
economies, then the economist who cannot consider justice simply fails at 
his chosen profession. His descriptions, based on aggregates alone, will 
never actually describe anything. Or at least not anything in the least way 
useful. I have not sufficient training to examine the issue in detail 
myself, but every instinct in me tells me that aggregates are not enough, 
and that justice and sound economics are intimately related. In any case, I 
think it would be a matter of supreme concern to all the members of the 
COG. Perhaps there is someone here who can direct me to the proper 
materials or studies on this issue.


>I personally see this idea  being applied to globalization. While no doubt 
>the  goal to create wealth for the multinational corporations , and maybe 
>their investors is prime.- At least for the GE's and Walmarts who need 
>among other things consumer purchasing power so that they can sell their 
>productsor services - there needs to be a population which has either cash 
>or credit to buy them in whatever country they want to expand.

Well exactly. Its hard to build a consumer economy without consumers. But 
if globalization is merely a way of reducing labor rates, it will 
eventually fail. If the only real commodity traded is labor, then 
globalization is counter productive and will drive the world closer to ruin 
and bankruptcy. But if countries really are trading surplus products, the 
effects cannot but be good, on balance. However, I suspect that the former 
is the case rather than the later.

>So it would seem that it is in their best interest to see that happen. I 
>imagine that they are bright enough to have figured it out I know of no 
>such examples. However, someone did a good job of providing TV sets to the 
>residents of the river slums in Bankok. This was 15 years ago and 
>hopefully by now those sets are being manufactured there.  I hope our 
>friend can help you and thank you for the question.It created an 
>interesting discussion different that the usual "what the Cincinatti 
>Bengals have to do to win a football game."We !  live in Louisville, 
>KY.  Don Ward.

Well? Did the fans come to any conclusions?


John C. Médaille

"A dead thing can go with the stream...
but only a living thing can go against it."
         -G. K. Chesterton
http://www.medaille.com/distributivism.htm
john@medaille.com