Inverting the Economic Order

[humus]

Inverting the Economic Order Wendell Berry in the September 2009 issue

My economic point of view is from ground level. It is a point of view
sometimes described as “agrarian.” That means that in ordering the economy
of a household or community or nation, I would put nature first, the
economies of land use second, the manufacturing economy third, and the
consumer economy fourth.

A properly ordered economy, putting nature first and consumption last, would
start with the subsistence or household economy and proceed from that to the
economy of markets. It would be the means by which people provide to
themselves and to others the things necessary to support life: goods coming
from nature and human work. It would distinguish between needs and mere
wants, and it would grant a firm precedence to needs.

A proper economy, moreover, would designate certain things as priceless.
This would not be, as now, the “pricelessness” of things that are extremely
rare or expensive, but would refer to things of absolute value, beyond and
above any price that could be set upon them by any market. The things of
absolute value would be fertile land, clean water and air, ecological
health, and the capacity of nature to renew itself in the economic
landscapes. The cultural precedent for this assignment of absolute value
that is nearest to us probably is biblical, as in Psalm 24 (“The Earth is
the Lord’s, and the fullness thereof . . .”) and Leviticus 25:23 (“The land
shall not be sold forever . . .”). But there are precedents in all societies
and traditions that have understood the land or the world as sacred—or,
speaking practically, as possessing a suprahuman value. The rule of
pricelessness clearly imposes certain limits upon the idea of landownership.
Owners would enjoy certain customary privileges, necessarily, as the land
would be entrusted to their intelligence and responsibility. But they would
be expected to use the land as its servants and on behalf of all the living.

The present and now-failing economy is just about exactly opposite to the
economy I have just described. Over a long time, and by means of a set of
handy prevarications, our economy has become an anti-economy, a financial
system without a sound economic basis and without economic virtues.

It has inverted the economic order that puts nature first. This economy is
based upon consumption, which ultimately serves not the ordinary consumers
but a tiny class of excessively wealthy people for whose further enrichment
the economy is understood (by them) to exist. For the purpose of their
further enrichment, these plutocrats and the great corporations that serve
them have controlled the economy by the purchase of political power. The
purchased governments do not act in the interest of the governed; they act
instead as agents for the corporations.

That this economy is, or was, consumption-based is revealed by the remedies
now being proposed for its failure: stimulate, spend, create jobs. What is
to be stimulated is spending. The government injects into the failing
economy money to be spent, or to be loaned to be spent. If people have money
to spend and are eager to spend it, demand for products will increase,
creating jobs, industry will meet the demand with more products, which will
be bought, thus increasing the amount of money in circulation, which will
increase demand, which will increase spending, which will increase
production—and so on until the old fantastical economy of limitless economic
growth will have “recovered.”

But spending is not an economic virtue. Miserliness is not an economic
virtue either, but saving is. Not-wasting is. To encourage spending with no
regard at all to what is being purchased may be pro-finance, but it is
anti-economic. Finance, as opposed to economy, is always ready and eager to
confuse wants with needs. From a financial point of view, it is good, even
patriotic, to buy a new car whether you need one or not. From an economic
point of view, however, it is wrong (and unpatriotic) to buy anything you do
not need. Only in a financial system, an anti-economy, can it seem to make
sense to talk about “what the economy needs.” In an authentic economy, we
would ask what the land, what the people, need.

From an economic point of view, a society in which every school child
“needs” a computer, and every sixteen-year-old “needs” an automobile, and
every eighteen-year-old “needs” to go to college is already delusional and
is well on its way to being broke.

This is but an excerpt from Wendell Berry's long essay on the cover of the
September issue of The Progressive.

http://www.brtom.org

[pscot]

1. We need a new way of thinking about

the economy. This essay provides a simple and elegant framework. Thanks for posting.

[Altoid_Cyclist]

2. It's amazing (in a sad way) how much Americans have come to "need everything".

Our society has become one of practicing extreme waste and pollution causing activities due in large part to greed and having to have the most toys on the block.

That's a great point that we need to take a step back and examine if our current economic policies are viable in the long run.

I don't think that we'll like what we see.