Friday, 3 February 2017

Poverty and Famine Beckon

Living On Borrowed Time

Classical economics tell us that the two key contributors to the production of goods and services are labour and capital.  Without both being used and deployed, a society will remain in grinding poverty.  Nothing much will be produced.  People will live from hand to mouth, and often hand will not be able to produce enough to satisfy mouth.  Famine and starvation beckon.  

It's a long, long time since famine stalked the land in Western countries.  In other places and nations, however, famine remains a latent threat, always a risk.  What makes the difference between famine being no threat at all, and it being a latent, stalking beast is the nature of the civilisation that sits atop the land.  The wealth of a nation resides in what its citizens collectively know and in how effectively they work and apply existing capital stock to exploit the latent opportunity present in all nations and lands.

Wealth effectively depends upon, and in large measure resides in, the space between our collective two ears.  The Bible contains the only belief system which explains why this is the case.
 It reveals that  man was created in God's image.  Since God is the original Creator of all things out of nothing, man--His image bearer--is also a creator, bringing forth that which did not exist before.  Mankind was (and remains) commanded by the Creator to "be fruitful and multiply and fill the earth and subdue it and have dominion . . . over every living thing that moves on the earth."  [Genesis 1:28]

When man does not carry out this duty, the creation becomes either a jungle or a wasteland--vast, empty, and unable to sustain human life.  But when man does labour to subdue the creation, he is able to create wonders that never existed before.  Even the sands of the earth can be marvellously exploited to create wealth, knowledge, and power.  After all, there is a reason the area south of San Francisco is called Silicon Valley.

A critical ingredient in the recipe to subdue and exploit the earth, to create and enjoy the latent wealth and glory of the earth, is the ownership of property under the protection of legal title.  When the law system of a country (which is another construct residing between collective ears) prohibits theft and covetousness, property can be transformed into a living resource to create endless goods and services, which, in turn, produce layers upon layers of wealth.  Consequently, poverty and famine no longer stalk the land, but are banished.

As De Soto puts it:
Legal property . . . gave the West the tools to produce surplus value over and above its physical assets.  Property representations enables people to think about assets not only through physical acquaintance but also through the description  of their latent economic and social qualities.  Whether anyone intended it or not, the legal property system became the staircase that took these nations from the universe of assets in their natural state to the conceptual universe of capital where assets can be viewed in their full productive potential.

With legal property, the advanced nations of the West had the key to modern development; their citizens now had the means to discover, with great facility and on an ongoing basis, the most potentially productive qualities for their resources.  As Aristotle discovered 2,300 years ago, what you can do with things increases infinitely when you focus your thinking on their potential.  By learning to fix the economic potential of their assets through property records, Westerners created a fast track to explore the most productive aspects of their possessions.  Formal property became the staircase to the conceptual realm where the economic meaning of things can be discovered and where capital is born.  [Hernando De Soto, The Mystery of Capital: Why Capitalism Triumphs In the West and Fails Everywhere Else (New York: Basic Books, 2000), p. 51.]
These days most people in the West remain oblivious to these great constructs and resultant benefits.  As the West has stupidly unmoored itself  from the Bible and the Christian faith it has merrily continued its journey, accepting that what De Soto describes is true, but having little idea why.  It is busy constructing its dream house in mid-air, without foundations.

The Marxists in the West now tell us that property is theft and that in order to prevent property and capital being instruments of exploitation, it must be "socialised"--that is, progressively owned by the state.  The Greenists agree, but add that all property is environmentally destructive and the only way to preserve the environment is to reserve all uses of property to the authority of the state, since it alone is not self-interested.  Bit by bit, inch by inch the West is now setting itself up to cycle over time into poverty and famine.

As formal property constructs erode, the West has put itself on the track to inevitable poverty.  These days, as internecine war amongst Muslims rages in the Middle East, people in the West are confronted daily with scenes of ancient cities and relics reduced to rubble and dust.  The Great Assumption is: "it would never happen here".  Really.  Remove the divine prohibition against theft and covetousness, and weaken legal title to property, and, once again, poverty and famine will become our lot.

Neither a man nor a culture can reject God's laws and embrace Leviathan without getting eaten up.

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