The E.U.’s Parliament and the U.S.’s House of Representatives in Dialogue

On November 1, 2024, “All Saints Day” in Roman Catholic Christianity, the E.U. announced that a peaceful delegation of the elected representatives of the EU’s Parliament would be travelling to Texas during the following week to “meet American counterparts,” which is to say, a delegation of the elected representatives of the US’s House of Representatives.[1] The key word here is counterparts, for the European Parliament is indeed of the same type of legislative body and at the same level in its federal system as is the American House of Representatives.

Both legislative chambers consist of elected representatives who are elected by E.U. and U.S. citizens. Although the respective states are divided into districts, the representatives do not represent the state governments or the states themselves. Just because the state governments map out the districts does not mean that the elected representatives to the federal chamber represent the states. In fact, every party in the Parliament and the House consists of representatives from more than one state. To insist that political parties exist only on the state level, whereas only blocs or nebulous groups exist at the federal level is ideological nonsense geared to “States’ Rights advocates” in the United States and “Euroskeptics” in the European Union. It is significant that members of the European People’s Party in the E.U. Parliament sit together, and the party has members from various states, who, as stated above, do not represent their respective states, but, rather, the E.U. citizens in federal legislative districts. The same is true in the case of the U.S. House.

So it is fitting that a delegation of the members of the E.U.’s Parliament would meet with members of the U.S.’s House. “The inter-parliamentary meeting is usually an opportunity for lawmakers from both sides of the Atlantic to exchange views of their legislative agenda and priorities.”[2] The parity implied here is correct, and thus obviates any ideological claim that a state in one union is equivalent, or on the same political-system level as the other union. In terms of geography alone, Texas and France, and Montana and Germany, are both cases equivalencies. Similar equivalencies pertain to Arizona and California, and Italy and Spain, respectively. In terms of population, whereas many of the respective states of the two unions are in the tens of millions, both unions are in the hundreds of millions. The two clusters evince the qualitative (i.e., a jump, rather than an incremental change) as well as a quantitative difference between the respective state and federal levels.

The E.U’s delegation was set to be chaired by MEP Brando Benifei of the Socialists & Democrats party and the U.S.’s delegation was to be chaired by Rep. Nathaniel Moran of the Republican Party. That the possibility of a U.S. tariff on goods imported from the E.U. was on the agenda, and the E.U.’s executive branch, the Commission, has exclusive authority, or competency, on commercial law in the E.U. does not mean that only economic issues would be discussed, as if the E.U. were a “trading bloc.” The three pillars, or enumerated powers, of the E.U. extend beyond trade and even economics to include social policy and justice, including human rights, for example. The U.S. delegation could enquire of its counterpart whether the recent electoral fraud in the prospective E.U. state of Georgia (not the U.S. state of Georgia, even given the controversy in 2020!) adds to foreign-agents law in significantly reducing Georgia’s chances of gaining statehood. The E.U. delegation could in turn enquire as the viability of U.S. elections, given the accusations in 2020 from within the United States.

In short, both the E.U. and U.S. have federal systems in which governmental sovereignty is “dual,” which is to say that although the respective states have both stated and residual domains of authority, some of them was delegated to the federal institutions, which in both unions comprise governments rather than only multilateral international organizations. To be sure, an element of the latter has been retained in both unions; specifically in the U.S. Senate and the E.U. Council, both of whose members are polities (i.e., the states) rather than representatives of federal citizens. In fact, the citizens have E.U. and U.S. passports, respectively. In general, that the balance of governmental sovereignty is closer to the states in the E.U. than in the U.S. does not mean that the two unions are not both cases of modern (i.e., dual sovereignty) federalism, as distinct from confederalism, in which all of the sovereignty resides with the state governments. In 1603, Althusius distinguished between plena and non-plena federalism with this in mind even though he modeled his theory of federalism on the Holy Roman Empire. Federalism itself was originally confederal, and fit international alliances because the members differed even in terms of the type of government they had. The U.S., and then the E.U. en suite, mixed national and international elements in what is now called modern federalism to distinguish it from confederalism, which is still evinced in international alliances and organizations such as the United Nations.  To conflate either the E.U. or U.S. with such alliances and organizations is to commit a rather basic category mistake. Whether out of ignorance of ideological fervor, such a mistake prevents the two federal unions from looking at each other to gain insights so as to move towards more perfect unions.

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1. Peggy Corlin, “MEPs Seek First Contact with Trump or Harris Regimes in Texas Next Week,” Euronews.com, November 1, 2024.
2. Ibid.

Adding Anti-Trust to Monetary Policy: The Case of Groceries

Monetary inflation is a complex phenomenon. Not only can its causes be several; it can make it more difficult to distinguish immediate and medium-term economic conditions from more long term, or structural changes impacting our species economically.  Of the former, the relationship between inflation and whether the markets are competitive or oligarchic (or even monopolies) can be better understood, and this in term can put us in a better position to assess the impact of longer-term changes, such as those stemming from the huge increase in the population of human beings since before the industrial age. The price of food (i.e., groceries) is a case in point. Specifically, the impact from presumably temporary shocks during the Covid pandemic should be distinguished from the impact of oligopolistic markets in keeping prices high, and of the increase in human mouths more generally (and longer term) representing increased demand for foodstuff in on a relatively fixed planet.

In addition to a spike in the prices of raw materials, or, moreover, factors of production, and a growth in the money supply above the growth in GNP, the gradual consolidation of an industry from market competition to oligopoly and even a monopoly can increase inflation. The consolidation of the U.S. meat-producer market, for example, could be expected to result in higher meat prices at grocery stores. Similarly, barriers to entry facing discount grocery stores could result in food prices staying high even after a temporary increase in factor costs. In short, government action to keep markets competitive or return them to the discipline of competition should go side by side with monetary policy, lest it be assumed that inflation is primarily a result of the growth in the monetary supply. Otherwise, keeping interest rates higher than would otherwise be the case could unnecessarily put a damper on job growth.

In June, 2024, the U.S. official unemployment rate increased to 4.1 percent; the next month, that figure was even high, standing at 4.3 percent. This triggered the “Sahm rule,” according to which “a recession is imminent or underway if the three-month moving average of the unemployment rate rises by 0.5 percentage points or more relative to its prior 12 month low.”[1] The U.S. economy added 114,000, rather than the expected 175,000 jobs in July, and some people were nervous that a recession might be on the way.[2]

Accordingly, U.S. Sen. Elizabeth Warren wrote, “Fed Chair Powell made a serious mistake not cutting interest rates. . . . He’s been warned over and over again that waiting too long risks driving the economy into a ditch. The jobs data is flashing red.”[3] The Fed kept the interest rate in place in order to fight inflation even though 4.3 percent is above the acceptable range for unemployment according to the Fed. In fact, Austan Goolsbee, President of the Chicago Federal Reserve, said at the time that 4.3 percent was something the Fed “has to respond to” by cutting interest rates.[4] Besides, he added, the “trends show inflation coming down across the board, multiple months in a row” as the labor market was cooling.[5]

Anyone shopping in a grocery store, however, would beg to differ, however, as the rise in food prices during the Coronavirus pandemic had not come down after the shocks, which included shipping as well as hoarding, had ended following the pandemic. Meat prices in particular had stayed very high even though such levels would be expected to attract new suppliers (or more supply) in a competitive market. But the meat-producer industry had been consolidating so a few large companies could essentially dictate prices to grocery stores, a related industry that had itself become oligopolistic. That the discount chain, Aldi, was not in the San Francisco region of California, for example, even in 2024 while Safeway and Whole Foods kept prices high suggests that the competitive mechanism, which protects consumers from the excessive greed of producers unrestrained by market discipline, was not working, for the basic logic of market competition holds that higher prices (and profits) attracts new producers such that supply increases and prices fall rather than stay high unless the cost of a factor of production has increased and stayed high.

To be sure, limits to the supply of food (and the cost of fuel for shipping) could be expected to become more salient as the human population level continues to increase dramatically. Whereas the 20^th century had begun with about 2 billion human beings on the planet, the 21^st century mark stood at 6 billion; by just 2023, that number had increased to 8 billion. At some point, the Earth’s agricultural potential being relatively fixed, could be expected to run up against increased demand for food. The common experience of having to pay more for groceries during and even after the pandemic due to temporary shocks and the lack of competition that would otherwise increase supply and thus reduce prices could be just a taste of what humans could expect in the 22^nd century.

That a species’ population can increase beyond its ability to feed itself was posited by Thomas Malthus (1766-1834) in An Essay on the Principle of Population, published in 1798. The theological significance alone was startling, as the possibility threw off the notion that God had designed Creation and so the existence of God could be inferred from the excellence of the design found in nature itself. Malthus also claimed that famine, war, or disease is nature’s means of naturally correcting a schizogenic (i.e., maximizing) population, and subjecting the creatures who are in God’s image to such hardship hardly seems like part of the design of an omnibenevolent deity.

Therefore, the mechanism of a competitive market assumes not only lower barriers to entry, but also the capacity for increased supply when prices are relatively high, and this second assumption may be increasingly untenable as our species continues to grow while the natural resources of Earth remain relatively fixed, allowing of course for efficiency gains from technological advances. At the very least, from this macro perspective, governments should not shy away from enacting and enforcing anti-trust mechanisms so prices reflect not only demand, but also whatever supply is possible, given the Earth’s natural resources, especially in terms of energy and food (and also housing). Moreover, concurrent and sustained increases in several industries oriented to human sustenance ought to be especially concerning regarding toll from both uncompetitive markets and our species’ growth.

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1. Alicia Wallace et al, “Markets End the Day Sharply Lower . . . “ CNN.com, August 2, 2024.
2. David Goldman, “Elizabeth Warren: The Fed Made ‘a Serious Mistake,” CNN.com, August 2, 2024.
3. Ibid.
4. Ibid.
5. Ibid.

On the Role of Agribusiness in Global Warming

Agriculture is a major source of carbon and methane emissions, which in turn are responsible for the general trend of the warming of the planet’s atmosphere and oceans. In fact, agriculture emits more than all of the cars on the roads. 10 percent of the emissions carbon dioxide and methane in the U.S. come from the agricultural sector. Livestock is the biggest source of methane. Cows, for example, emit methane. Methane from a number or sources, including the thawing permafrost, accounted for 30 percent of global warming in 2023. As global population has grown exponentially since the early 1900s, herds of livestock at farms have expanded, at least in the U.S., due to the increasing demand.[1] We are biological animals, and we too must eat. More people means that more food is needed, and the agricultural lobby in the U.S. is not about to let the governments require every resident to become a vegetarian. Indeed, the economic and political power of the large agribusinesses in the U.S. have effectively staved off federal and state regulations regarding emissions. It comes down to population, capitalism, and plutocracy warping democracy.

The full essay is at "On the Role of Agribusiness in Global Warming."

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1. Georgina Gustin, “Climate Change and Agriculture,” Yale University, February 22, 2024.

Cases of Coronavirus: Comparing China, the U.S.A., and Italy

On March 26, 2020, “the US overtook Italy and China as the country with the highest number of confirmed Covid-19 cases.”[1] At first glance, this statement can gain sufficient traction to become definitive. The implication that the U.S. is mismanaging the pandemic can even be regarded as valid even though the comparison itself is invalid.

Firstly, the United States, Italy, and China have very different population-levels. At the time, China’s population stood at roughly 1.435 billion, the U.S. population was 331 million, and Italy’s was 60 million. The U.S. had at least 81,321 cases.[2] China had at least 82,000 cases.[3] Italy had at least 80,539.[4] Per capita, the U.S. had at least one case for every 4,070 people; China had at least one per 17,500 people; and Italy had at least one case per 745 people. Adjusted for population-level, Italy was worse than the United States, which in turn was worse than China. Of course, China was coming down from its apex of cases, while the United States had not yet hit its apex and Italy may not have hit its own yet. Singapore’s confirmed 631 cases may seem a trifle until the city-state’s population of 5,838,360 is taken into account.  With at least one case per 9,253 people, Singapore stood between the United States and China in severity of cases.  So, at the very least, taking the population level into account is vital in comparing countries on the coronavirus pandemic.

Secondly, comparing countries assumes that they are all equivalent, as countries, not only for comparative purposes, but also as political entities. This is a modern assumption—that a city-state is equivalent to an empire, to take two points at the extremes; the kingdom being between the two. In other words, it is assumed that just because every country is sovereign, every country is equivalent even in non-political matters of comparison.

Historically, the attribute of sovereignty was not so decisive in declaring equivalencies. No one would claim that a stand-alone kingdom was the equivalent of an empire. For example, Althusius’ theory of federalism, described in his Political Digest (1604), clearly distinguishes a city, province, kingdom, and empire from each other. Based in part on the Holy Roman Empire, Athusius’ version of federalism contains a hierarchy, including guilds, villages, cities (composed of villages), provinces/regions, and the empire. Representatives of the guilds sit on village councils, village representatives sit on city councils, and so on until representatives of the provinces sit at the federal head—the empire’s governance.[5] It would be absurd to claim that a kingdom in one empire is equivalent to either a city or another empire. With these terms of political organization going by the wayside, the vague, over-generalizing term, country, filled the void, with its fallacious assumption that the attribute of sovereignty means that countries are equivalent in matters of making even non-political comparisons. This working assumption, as part of the status quo by the twenty-first century, is so ridiculous that the underlying presence of a warping large mass can be indirectly detected.[6] The ideology of nationalism, for instance, would have sufficient force to warp reasoning, as well as perception.

To get a glimpse of the flawed assumption, we can superimpose the historical terms on early-modern/modern countries (e.g., the UK, rather than the medieval England). At least as of 2020, the United States and China, as well as the European Union, were empire-level polities, whereas the E.U. state of Italy was an (early-modern) kingdom-level polity, and Singapore was a city-state. The flaw in only using the number of cases of coronavirus rests on the deeper flawed assumption that all countries can be classified on the same level, notwithstanding huge differences in scale and political type. In the E.U. and U.S., representatives of the states (early-modern kingdom level) sit in bodies at the empire level (i.e., the European Council and the U.S. Senate). To treat a state in one empire as equivalent to another empire thus represents a category mistake (i.e., conflating two different categories as one).

By implication, to treat the regions or provinces of a U.S. or E.U. state as equivalent to the U.S. or E.U. state level (provincia level in the ancient Roman Empire) also involves a category mistake. The American colonies, which became sovereign states (in a league or confederration), were mapped out to be on the scale of the early-modern kingdoms in Europe.[7] Hence the geographical scales of the U.S. and E.U. states cluster. California is roughly the size of Spain, Arizona of Italy, Texas of France, and Montana of Germany. The small states also cluster, but the differences between the large and small states is dwarfed by the difference between the state cluster and the unions' cluster. In other words, the difference between the sizes of the states and the unions is sufficiently larger than how much the states differ and the unions differ that a "step" (i.e., difference in kind, rather than just in amount) can be seen. That the unions are made up of the states is another way of pointing to two plateaus rather than a continuous slope (i.e., saying that the U.S. is larger than France, which is the size of Texas). This is why conflating the two clusters (i.e., of the states and of the unions) represents a category mistake. 

Therefore, comparing Italy’s 80,539 cases to the United States’ 81,321 can be understood as misleading, therefore, because not only are the population-levels so different, but also Italy is a state in a union that in turn is equivalent to the U.S. Logically, if the two unions are equivalent, then a state in one cannot be equivalent to the other union.

In comparisons in which either the E.U. or the U.S. as one or both sides, the overgeneralization is itself problematic because it hides the significant differences between the states. In other words, that the American States differed significantly in coronavirus cases in March, 2020 was lost in comparing the entire U.S. to Italy. With a population of 5.85 million, Wisconsin had at least 707 cases on March 26, 2020, and therefore one case per 8,274 people, while Washington (the state) had at least 3,207 cases in a population of 7.8 million, and therefore one case per 2,432 cases. The represents a substantial difference that is hidden in aggregating all of the states' data. The statement that the entire United States just got worse in coronavirus cases than a state in the E.U. is thus problematic. 

Even in correcting for the category mistake (e.g., comparing an empire-scale geographic polity with an early modern/modern "kingdom"-level polity, we would over generalize to say that the E.U. is worse off than the U.S. precisely because such a comparison ignores significant differences between the states in both unions. In fact, even if it made sense to generalize the entire U.S. (i.e., states differing little) rather than report predominately on the States, then the E.U. too should have been at the other end of the comparison, even if its states differed appreciably. As both unions were empire-scale, their respective states were very likely to different on a variety of indexes.

Having corrected for the category mistake and taken account of the fact that state-level differences were significant in both unions, greater insight could have been gleamed on how the virus was faring in Europe and America by comparing the "hot spots," for example. That is to say more accurate comparisons would be made between Italy, New York, France, Germany, California and Washington because they were all being battered by the illness by the end of March (which was going out like a lion).

On March 26, 2020, New York (the State) had over 37,000 cases in population of 20 million: one case for every 542 people, worse than Italy's 745 people. Washington (the State) stood at 2,432 people, less severe than the E.U. state of Italy. From this standpoint, the derivative (i.e., the change in the rate of increased cases) for each state could be used to compare the "hot spots" with regard to where they are relative to their respective apexes (i.e., the highest, hence peaking, infection rates). Comparing the "hot spots" could thus have been quite useful. 

Because the state level in both the U.S. and E.U. bore out tremendous differences in severity, it is just common sense that states rather than the unions, or even worse, a union and a state in another like union, should be compared. Moreover, that vast differences in population and in political category, or even just geographical scale (Italy being roughly the size of Arizona), have been routinely missed is a serious flaw both in reasoning and knowledge of political organization. I submit that the flaws in the default-axis of comparison have been protected by a worldwide blind-spot, which has enabled a myriad of false-comparisons. 

Nietzsche would doubtlessly write that a brain-sickness predicated on a weakness was behind the warping of reason and perception. A herd-animal mentality, including in the animals who cannot resist the urge to dominate, could explain how the warping became ingrained in the societal (and global) status quo. I contend that nationalism and turning the attribute of governmental sovereignty into a tautology rendered the flaws both invisible and part of the taken-for-granted status-quo. 

Well into the twenty-first century, people (and governments) around the world were still intent on assuming that the attribute of sovereignty justifies the assumption of equivalence between countries even in making non-political comparisons. Singapore and the U.S. can be compared on a variety of things because both are countries, meaning both are recognized internationally as sovereign within their respective territories. 

With its strong desire, ideology can eclipse reason and perception without leaving finger-prints. Nationalism has likely been playing a subterranean role in the warping of equivalence as in comparing E.U. states like France and Germany to the U.S.A., with the E.U.'s governance and the American States being deliberately overlooked or even blocked from view in a sort of state of denial. 

Even in comparative politics, confounding the state and federal levels of both the E.U. and U.S. is problematic. For instance, federalism came out of empire-level groupings and has the greatest benefits for empires, which are by definition heterogenous (diverse between provinces/states). To model the governance system of the E.U. or U.S. on that of Sinapore (a city) would entail a greater downside of uniform (i.e., union-wide) laws because in empires, "one size does not fit all" of the circumstances of the states (e.g., significant differences in coronavirus infection). Hence New York's government took much more strict measures against the spread of coronavirus than did the government of Kansas in March, 2020. Had the U.S. President handed down a severe, blanket "lock-down," it would have gone unnoticed that several states did not yet need that level of caution through government action. Hence, the state governments were able to set policies according to their situations. As in the case of the E.U. state governments, it was even possible for those American governments to distinguish between their respective regions (or provinces) in taking precautionary measures.[8] As a city, Singapore, unlike the states (and empire-scale unions), could only have one situation. Rather than being influenced by where sovereignty resides (at both the state and federal levels in the U.S. and E.U.), the level at which comparison is best made depends on what is the subject of comparison (e.g., coronavirus) and which level (or cluster) of institutional and geographical political organization (i.e., state, county/province, state/kingdom, or empire-scale country) presents the greatest differences on the subject.

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[1]. Jeffrey Sachs, “Why America Has the World’s Most Confirmed Covid-19 Cases,” CNN.com, March 27, 2020 (accessed March 28, 2020).

[2]. Donald McNeil, “The U.S. Now Leads the World in Confirmed Coronavirus Cases,” The New York Times, March 26, 2020.

[3]. Sachs, “Why America Has the World’s Most Confirmed Covid-19 Cases.”

[4]. Crispian Balmer and Gavin Jones, “Italy Suffers Setback to Hopes Its Corronavirus Epidemic Might Be in Retreat,” US News & World Report, March 26, 2020.

[5]. Skip Worden, British Colonies Forge an American Empire: A Basis for Transatlantic Comparisons (2015). Athusius' theory of federalism is also discussed and applied.

[6]. I am thinking here of how the presence of a black hole can be detected by looking at the warped orbits nearby (their shape and relatively high speed).

[7]. Skip Worden, British Colonies Forge an American Empire: A Basis for Transatlantic Comparisons (2015).

[8] Lest it be argued that the most suitable level of comparison is that of intra-state regional/provincial, the state size-cluster is not so large that intrastate differences would be as big as the interstate differences. However, the fact that the counties of Dane (which contains the state capital city, Madison) and Milwaukee were both more severely hit on March 26, 2020 than were the other counties suggests that state governments had reason in at least once case to either have different policies for counties or delegate the power to the county governments. Adopting the county level for comparisons within or across empire-scale unions would not be parsimonious and thus practical. Also, I suspect that the typical inter-county differences were less than the inter-state differences. This is why I stopped at the state level in assessing the best level of comparison generally. 

Greek Austerity: Pressure on the Environment

“While patrolling on a recent cold night, environmentalist Grigoris Gourdomichalis caught a young man illegally chopping down a tree on public land in the mountains above Athens. When confronted, the man broke down in tears, saying he was unemployed and needed the wood to warm the home he shares with his wife and four small children, because he could no longer afford heating oil. ‘It was a tough choice, but I decided just to let him go’ with the wood, said Mr. Gourdomichalis, head of the locally financed Environmental Association of Municipalities of Athens, which works to protect forests around Egaleo, a western suburb of the capital.”[1] Tens of thousands of trees had disappeared from parks and forests in Greece during the first half of the winter of 2013 alone as unemployed Greeks had to contend with the loss of the home heating-oil subsidy as part of the austerity program demanded by the state’s creditors. As impoverished residents too broke to pay for electricity or fuel turned to fireplaces and wood stoves for heat, smog was just one of the manifestations—the potential loss of forests being another. On Christmas Day, for example, pollution over Maroussi was more than two times the E.U.’s standard. Furthermore, many schools, especially in the north part of Greece, had to face hard choices for lack of money to heat classrooms.

Greek forests were succumbing  in 2012 to the Greeks' need to heat their homes as austerity hit.   source: Getty Images

Essentially, austerity was bringing many people back to pre-modern living, perhaps including a resurgence in vegetable gardens during the preceding summer. At least in respect to the wood, the problem was that the population was too big—and too concentrated in Athens—for the primitive ways to return, given the environment's capacity. 
To be sure, even in the Middle Ages, England had lost forests as the population (and royal plans) grew. In December 1953, many Londoners decided to use their fireplaces to burn wood, resulting in pollution blanketing the city. As a result, thousands died and the city outlawed the use of fireplaces. No one probably thought to ask whether the city had gotten too big—and too dense. No policy was enacted that would result in a shift in population out of the region.
Generally speaking, human population levels made possible by modern technology and medical advances have become too large for a return to pre-modern ways of life. Because of the extraordinarily large sizes of the modern city, including Athens, suddenly removing modern technology, which includes government subsidies, it is especially problematic when many people are forced to fend for themselves to meet basic needs. The efficiency of modern technology, including in regard to utilities and food distribution, is often taken for granted, even by governments, so the impacts on the environment when masses of people “return to nature” can be surprising. Nature has become "used to" seven billion humans on the planet in large part because we have economized via technology so the full brunt of the population-size is not felt. Particularly in industrial countries, societies are reliant on modern technology because without it the bulging population is unsustainable. 
Put another way, we have distanced ourselves from nature, and our growth in numbers in the meantime has made it impossible for us to “get back to nature” in a jolt, especially by many people. It is in this sense that governmental austerity programs that cut back on sustenance are dangerous not only for society, but also the ecosystems in which humans live. Accordingly, by mid-January, 2013, the Greek government was considering proposals to restore heating-oil subsidies. It is incredible that the financial interests of institutional creditors, including other governments, were even allowed to put the subsidies at risk.
In ethical terms, the basic sustenance of a people takes priority ethically over a creditor’s “need” for interest. The sin of usury is sourced back to the origins of lending as an instance of charity rather than money-making either from the plight of the poor or profit-uses.[2] When a person in antiquity was in trouble financially, someone with a bit of cash would lend some with the expectation that only that sum would be returned. The demand for interest on top was viewed by the historical Church as adding insult to injury (i.e., the bastardization of charity into a money-making ruse). Then exceptions were made for commercial lending, wherein a creditor could legitimately demand a share of the profit made from the borrowed money in addition to the return of the principal. As commercial lending came increasingly to characterize lending, the demand for interest became the norm, even on consumption loans when no profit would ensue to pay off the loan with interest. The notion that interest is conditional on a borrower having enough funds was lost, causing much pain to many in the name of fidelity of contract, as if it or the creditor’s financial interest were an absolute. Put another way, the default has swung over from the borrowers to the lenders to such an extent that society may look the other way as people literally have to cut down trees to heat their homes because creditors have demanded and won austerity touching on sustenance programs.
Therefore, especially in Christian Europe, putting people out by pressure being applied to state governments in the E.U. to make payments even in the context of a financial crisis can be considered to be untenable, ethically speaking. I am not suggesting that states should be profligate with borrowed funds. Rather, just as Adam Smith’s Wealth of Nations is bracketed by his Theory of Moral Sentiments, so too an economy (and financial system) functions best within moral constraints. 

1. Nektaria Stamouli and Stelios Bouras, “Greeks Raid Forests in Search of Wood to Heat Homes,” The New York Times, January 11, 2013.
2. Skip Worden, God's Gold, available at Amazon. 

Democracy and Over-Population in India: Foreign Direct Investment

How well can the democratic form of governance serve as a means by which a society is circumscribed, or restricted in some way? In other words, can self-government be used to enact self-discipline on the body politic itself? Adding another level to this question, can elected representatives be expected to go beyond fixes that are perceived societally as sufficient to redress the underlying causes of governmental, economic, or societal problems? Far from urging or implying the supremacy of non-democratic forms of government, such questions invite improvement in democracy itself. In this essay, I reflect on these questions using India’s industrial policy as a case study.

Faced with economic growth below 6 percent, a budget deficit expected to breach 6 percent of India’s GDP, a possible downgrade in the country’s credit rating to junk status, and the rupee hitting record lows, Sonia Gandhi, the head of the Congress Party, spoke for the first time in late 2012 in support of allowing foreign companies such as Wal-Mart into India. Prime Minister Manmohan Singh and others had been urging her to embrace the reform. Appealing to Sonia Gandhi’s passion for social welfare programs, the prime minister told her that more foreign direct investment would be necessary to expand them. Most notably, the Congress Party boss was pushing a $5.6-billion food-security bill and a rural employment-guarantee program. According to the Wall Street Journal, there was already “high spending on subsidies” at the expense of “growth-generating capital projects.” In effect, the latter get “sub-contracted” in foreign direct investment.  Relatedly, the finance minister, P. Chidambaram, issued a plan to reduce the federal government’s deficit and sell stakes the government has in state-owned companies.

 

Singh and Gandhi at a rally. It is clear who's the boss.   AP

 

Lest Sonia Gandhi’s support be viewed as a panacea, other reforms, such as making it easier to acquire land, remained “stuck in the bureaucracy,” according to the Wall Street Journal. The government’s “mind-set is I will not fix the cause of the issue, I will put a Band-Aid on it,” Rahul Bahsin of Baring Private Equity Partners India said. Indeed, although Walmart would doubtless hire local labor both in the construction and retail-operations of the stores, that foreign-direct-investment alone would not be large enough to make a dent in the social welfare needs of India’s poor. Additionally, the company’s aversion to workers’ rights (not to mention unions) and the related low compensation and benefits for in-store employees could mean additional troubles for Sonia Gandhi as worker groups seek protection from the federal government.

 Moreover, with over a billion people at the time the policy was being considered, the prospect of employing all able-bodied people of working-age in India was undoubtedly a daunting task in the midst of a global recession following the financial crisis of 2008. It was not as though the Indian government could simply invite hundreds of millions of Indians into computer-science and engineering classes and then into high-tech ready-made jobs. Over-population could have been the long-standing underlying problem, or cause of the unemployment and related subsidies.

 The bureaucracy and coalition in-fighting, as well as the “Band-Aid” approach oriented to incremental additions in employment through FDI could be a reflection of India’s over-population—a more basic problem that eludes mere policy prescriptions increasing foreign-direct-investment. Especially if a given  over-populated area has a disproportionate number of unemployed people, tackling the underlying problem could be expected to relieve the pressure on policies such as foreign direct investment to make up the difference. Meanwhile, other symptoms, like global warming and food prices, would be redressed. The question may therefore be whether a democracy is a feasible venue for such “cause-oriented” legislation to be enacted.

 Whereas government officials in China did not have to worry about a democratic backlash from the government’s one-child policy in the late twentieth century, the case of India raises the question of whether a self-governed people can regulate their own society by democratic means. A democracy may be hard-pressed in putting into effect painful legislation to curb excesses such as over-population—literally to restrict rather than promote a basic sort of growth. The value put on that value alone since the mercantile days could give legislators an implicit mandate to foster rather than retard population growth.  Furthermore, the “Band-Aid” approach might be more in line with the workings of a democracy if apparent measures are sufficient to get one re-elected. One could point to the perennial “fixes” in the U.S. regarding entitlement programs and deficit-cutting as other examples, and to the efforts of the E.U. to bail-out heavily indebted states as yet another example. Elected representatives seem to prefer to take little bites, incrementally, rather than enact fundamental laws that are oriented to causes rather than symptoms.
In contrast to these questions, an uncritical approach to the spread of democracy around the world, such as potentially in the “Arab Spring,” could actually exacerbate global problems. If the species continues “un-self-regulated,” meaning more and more over-populated, nature will undoubtedly step in at some point and impose restraint (e.g., famine, climate, war, disease). It may be an open question whether we as a species can stave off such a verdict from Mother Nature. Ironically, our consensus form of government may lessen the odds.

 

Source:

Romit Guha and Rajesh Roy, “India’s Gandhi Now Backs Overhauls,” The Wall Street Journal, November 9, 2012.

Springtime for China's Coal Industry: Is China Too Big to Swerve Enough to Avoid the Climatic Iceberg Ahead?

Even as Chinese government officials “called on the United States to recognize established science and to work with other countries to reduce dependence on dirty fuels like coal and oil,” China was “scrambling to mine and burn more coal.”[1] Notably, short-terms concerns were dominant. “A lack of stockpiles and worries about electricity blackouts” were “spurring Chinese officials to reverse curbs that [had] once helped reduce coal production.”[2] By December, 2016, coal mines were reopening, and with them coal miners were returning to work. The renewed activity would of course make it more difficult for China and the world to meet CO2 emissions targets, “as Chinese coal is the world’s largest single source of carbon emissions from human activities.”[3] In fact, China’s use of coal results in more emissions “than all the oil, coal, and gas consumed in the United States.”[4] The implications for being able to contain the global rise in temperature within 2 degrees C are not bright from this real-life scenario. It is important, therefore, to grasp the underlying dynamics behind China’s plight.

Even as 2014 had brought “the autumn of coal,” and 2015 and early 2016 instantiated the winter, the new spring later in 2016 came during what would be the hottest year for the planet since record-keeping began. The cyclical pattern evinced here does not fit with the maximizing nature of global warming.

The Chinese government was not adjusting fast enough, given the climatic toll even by the closing months of 2016. The sheer scale involved is likely the main culprit—China’s population being over a billion. Despite ambitious hydroelectric-dam projects and “the world’s largest program to install solar panels and build wind turbines,” coal still produced almost three-quarters of the country’s electricity.[5] Even with conservation measures on the use of electricity—which, by the way, are practically non-existent in sunbelt republics like Florida and Arizona—a billion people must necessarily consume a lot of energy cumulatively. Even with the one-child policy, the sheer size of China’s population was something the government could not ignore.

The dynamic I have in mind is that of the Titanic, the largest ship of its day (1912) and yet with a rudder that was too small, given the size of the ship, to turn it sufficiently in time to avoid the upcoming iceberg. By analogy, a climatic “iceberg” was approaching Earth so fast and was so close even by the end of 2016 that the governments of large, empire-scale, countries like China and India would need larger rudders in order to steer close enough to alternative energy sources to have even a chance of avoiding a collision with full-blown climate change. The culprit, in other words, lies not only in the proclivity of human nature to privilege instant gratification backed up by short-term politics and thinking; our ships of state are outmoded, given how large we’ve allowed our species to become. The problem is thus not in China’s rough transition from central-planning to a government-regulated free market.

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[1] Keith Bradsher, “Despite Climate Vow, China Scrambles for Coal,” The New York Times, November 30, 2016.

[2] Ibid.

[3] Ibid.

[4] Ibid.

[5] Ibid.

Prognosis for the Chinese Economy

At the end of February 2012, the World Bank released its “China 2030” report in Beijing. The bank’s president, Robert Zoellick, said that China’s economic growth model is unsustainable, so significant reforms are needed. The report projects growth down to five or six percent annually by 2030, down from the ten percent annual growth in the thirty years up to the issuance of the report. Given the nature of the reforms, the Chinese government officials have their work cut out for them.

For instance, the report calls for “further reforms of state enterprises,” including “separating ownership from management.”[1] Even in the case of the private sector in the U.S., such a separation has been daunting, as CEO’s typically control their respective boards—even being chairman of the board. For state enterprises, management may blur into the government officials under whom the enterprises are run. Moreover, the public or state interest is typically more salient in state enterprises, so separating management from the ownership can raise problems of legitimacy and accountability. Furthermore, lacking an independent judiciary, China is not exactly the sort of system wherein the checks and balances of a separation of ownership and management could viably function. In other words, hierarchical accountability wherein a boss tells a subordinate what to do is more in keeping with the macro political economy of China.

Secondly, the report urges China to build several “world-class research universities.”[2] Here again, the lack of an independent judiciary may make foreign scholars wary of living in China. On the plus side for China, strengthening research domestically may relieve the pressure to pirate technology from foreign companies (sharing technology is often a condition of foreign direct investment). More research done in China may result in relaxed FDI requirements and less industrial spying. The result could be higher economic growth rates both in the short term and beyond.

Lastly, the report urged more of a focus on environmental technology and more spending on social programs (ironic advice given to a communist country). Just months before the report, Beijing had agreed to make public the measurements of finer pollutants in the city (as the U.S. embassy had been publishing its own numbers there anyway). While environmental technology could make a dent, the ultimate problem for the Chinese concerning not just pollution, but economic sustainability as well, is the huge population—over a billion. Simply put, having more people means more must be consumed. Whether in terms of food or more cars on the road, the population itself may not be sustainable, especially as more of it has become densely-packed in urban centers. Ultimately, sustainability for our species has to do with whether we can limit ourselves, not just individually or even in our cities, but also as a species.

1. Bob Davis, “World Bank Chief Urges Reforms for Beijing,” The Wall Street Journal, February 27, 2012.
2. Ibid.

Food Prices Rising: Will the Global Population Growth Outstrip Food Supply?

I contend that it is in our interest as a species to see that our population size is managed toward a steady state rather than as a maximizing variable (i.e., schizogenic). In fact, we have a right and obligation as one body to see that our various limbs are coordinated such that none engages in hypertrophy. That is to say, the whole has the right to protect its viability by arresting excessive growth in one of the parts. That much of the world's population growth takes place in the developing world does not mean that this right, or obligation, of the world is somehow a plot by the developed countries to oppress the poorer countries. In fact, much of the pain of the higher food prices is in the developing world rather than in the industrialized countries, so it is in the interest of the developing countries to accede to the world’s demand that their population growth be stopped.

According to USA Today, by mid-March in 2011 the World Bank’s food index had soared 29% from its level just the previous January and was a mere 3% below its 2008 peak. From March in 2010, Corn had increased 52%, sugar, 60%, soybeans, 41%, and wheat 24 percent.  The paper reports that the surge in food prices had many causes, including 1) rising population, which means increased demand for food, 2) speculators, who bid up commodity prices to artificial heights unrelated to supply, 3) soaring oil prices, which increase resource costs to the farmers and transporters, 4) trade policies, which become restrictive when shortages arise within a country (increasing the price on the world market), and, ironically, 5) improved standards of living in emerging nations, as new middle class consumers buy more meat. Of all of these factors, I contend that the rising population is the most fundamental, followed up by the related factor of oil.

A few months into 2011, the world's population stood at 6.8 billion, more than double the three billion in 1960. For a person of 50 years, the world's population had doubled in his or her lifetime. Although Thomas Malthus, the early 19th-century scholar who proposed that the world population could exceed the Earth’s ability to feed everyone, was controversial in his day because how could an omnibenevolent deity's design include such a harmful flaw, Malthus's theory has been virtually ignored in the 21st century as of 2011 as India and China in particular have continued to grow in population at unsustainable rates (especially India--China having a quasi-one-child policy that has moderated its increase). Dan Seiver, a financial economist at San Diego State University, pointed at the time to the green revolution as still being implemented in parts of the world; he is thus not yet ready to concede that the Mathusian thesis has arrived. However, in his work, he discounts the relatively high population growth rate; the increased efficiency or yield from the continued dissemination of "green" technology would have very great to outweigh the fixed (and in fact constricting) constraint of the world’s fertile land area that is used to grow food. In fact, according to the World Bank’s Hassan Zaman, the percentage of the U.S. corn crop that was used to make ethanol went from 31% in 2008 to more than 40% projected in the 2010-2011 growing season. While it is true that unlike the supply of oil in the ground, the land is being consumed, it can indeed be overused if it is not allowed to lie fallow, for example, to rest for a growing season. As the growing population exerts more and more pressure on the land to produce more and more, the land, like a horse pushed too far on a long journey on a hot August day, will tire and slow down. This would tend to happen just as the world needs each agricultural acre more. Therefore, if we as a species are unwise and expedient now in how we manage our land, our descendants will pay for our selfishness later.

While the effect of higher food prices is modest in the developed world, 50% or more of a family budget goes toward food in many emerging markets. American consumers spend about 9% of their income on food, and another 3% for dining out. The difference is not because food is more expensive in the developing world; rather, the percentage is so high because the typical income there is so low. “For many people who spend two-thirds or three-quarters of their income on food, even small price increases disrupt normal routine,” says Hassan Zaman, lead economist for the World Bank in poverty reduction and equity. “They start sacrificing non-food items, such as clothing, and then start eating less.” Indeed, the rising cost of food has been one factor in the protests in the Middle East that were not so pristinely "pro-democracy" as the media represented. 

USA Today reports, for example, that "(w)hen Mohamed Bouazizi set fire to himself in Tunisia in December [of 2010], it wasn’t because he was yearning to vote. It was because he couldn’t feed his family and police had confiscated the fruits and vegetables he was trying to sell." Although perhaps not focused on gaining a vote, however, Bouazizi had had enough of police-state tyranny so his protest was not merely economic. Perhaps the economic, at least when it manifests in vast inequalities supported by an infrastructure tilted by powerful vested interests rather than by a differential in talent and effort, is inherently political.

In short, developing countries should be amenable to population control even if the directives come from international organizations. Such countries should not resist the world acting as one body just because much of correction needed for sustainable human living on Earth would take place in the developing countries.  We as a species can no longer afford to be petty or partisan with such matters as concern our species' continued existence. If the world does not act as one mind over its body and engage in some much needed weight-control, the patient will grow too big and soon die of a heart attack. In the end, it is not a developed/developing contest, but, rather, a decision for all of us: are we to continue growing like a virus or are we better than that?  If we continue to refuse to take responsibility for our species as a whole, perhaps the cock roach will deserve to survive us.

It is ironic that we vaunt ourselves as being made in the image of God while our species refuses to step up to the plate even to manage itself so it can survive. Many of the world's religions teach us to submit to something greater--to something wholly other. It is more difficult, it would seem, for us to submit to the good of our species as a whole, even as we as a species run up against the semi-permeable membranes that delimit us on our planet in so many ways.

I contend that we are getting closer Malthus’ "the threshold point." Future population growth (and the added consumption, such as of food and energy, that is inevitable with such growth) could have dramatic implications for human life. The previous growth did not have such implications, at least  with respect to the world as a whole, so that growth was qualitatively different than that which we shall face if we continue to add billions to the global human population.  This qualitative distinction is precisely what we as a species have been having such a difficult time in grasping. To the chagrin of financial chartists, who try to divine stock movements in the future based on past trends, what was the case yesterday may not be the case tomorrow anymore. We got hits of this when the global financial system almost collapsed in September of 2008 and the Japanese nuclear plant almost had a meltdown in March of 2011. There being no financial market or no Japan would have been a wake-up call to us all concerning the assumptions we all implicitly make about there being a tomorrow like today. The sun may rise again, but we may not be around to watch it. Being made in God’s image does not guarantee us a seat. To grasp this vital point requires moving one's eyes from the rising prices on the shelves at our favorite local grocery store to consider the big picture with respect to the human race on planet Earth.  To act on this point requires significant reform of international organizations, such that they would be more than the sum of their parts.

If coordination between countries such as through the U.N. is not sufficient to arrest growth in the worst offenders, a transfer of a degree of sovereignty adequate for the tasks needed to avert reaching the threshold point beyond which the Earth can no longer support the human race is needed. This is particularly true if the worst offenders do not have the political will to correct themselves even if doing so is in their own interests. All too often, continuing in the status quo is too convenient to be resisted with enough energy to reverse the entropy even if correction is urgently needed. Lest the fear of a world government or federation enable the insufficient coordination to be presumed as the best we can do, the governmental sovereignty that is transferred should be accompanied with a design of checks and balances such that political consolidation does not occur. This is not, in other words, an argument for one world government. Rather, it is an observation that the human race as a species as reached a point where the species itself needs manage itself with respect to the planet as a constraint. Otherwise, the continued viability of our species will be in jeopardy. The fear of nuclear war during the last half of the twentieth century was just the dawning of this recognition. The question now is whether we act on our new awareness and situation with respect to the Earth.