State of Mankind

A New Way Of Thinking

Month: July, 2012

Financial Capitalism

Continuing with our study of economic changes, we will look at the next stage–Financial Capitalsim.  Quigley describes this system:

“The third period we might call financial capitalism.  It began about 1850, reached its peak about 1914, and ended about 1932.  Its typical forms of economic organization were the limited-liability corporation and the holding company.  It was a period of financial or banker management rather than one of owner management as in the earlier period of industrial capitalism.” (Page 38)

As with industrial capitalism, financial capitalism was a development under the laissez-faire system or automatic economic control.  It occured as industry grew and bankers gained capital.  Capital was in greater need to fund larger industry, and therefore bankers gained more control.  Now a look at the good and bad of this system:

“By 1900 social developments took a direction so different from that expected by Marx that his analysis became almost worthless, and his system had to be imposed by force in a most backward industrial country (Russia) instead of occurring naturally in the most advanced industrial country as he had expected.

“The social developments which made Marx’s theories obsolete were the result of technological and economic developments which Marx had not foreseen.  The energy for production was derived more and more from inanimate sources of power and less and less from human labor.  As a result, mass production required less labor.  But mass production required mass consumption so that the products of the new technology had to be distributed to the working groups as well as to others so that rising standards of living for the masses made the proletariat fewer and fewer and richer and richer.  At the same time, the need for managerial and white-collar workers of the middle levels of the economic system raised the proletariat into the middle class in large numbers.  The spread of the corporate form of industrial enterprise allowed control to be separated from ownership and allowed the latter  to be dispersed over a much wider group, so that, in effect, owners became more and more numerous and poorer and poorer.  And, finally, control shifted from owners to managers.  The result was that the polarized two-class society envisaged by Marx was, after 1900, increasingly replaced by a middle-class society, with fewer poor and, if not fewer rich, at least a more numerous group of rich who were relatively less rich than in an earlier period.  This process of leveling up the poor and leveling down the rich originated in economic forces but was speeded up and extended by governmental policies in regard to taxation and social welfare, especially after 1945.” (Page 41)

Now, a look at the darker side that came to full power under financial capitalism.  Again from Tragedy & Hope:

“The merchant bankers of London had already at hand in 1810-1850 the Stock Exchange, the Bank of England, and the London money market when the needs of advancing industrialism called all of these into the industrial world which they had hitherto ignored.  In time they brought into their financial network the provincial banking centers, organized as commercial banks and savings banks, as well as insurance companies, to form all of these into a single financial system on an international scale which manipulated the quantity and flow of money so that they were able to influence, if not control, governments on one side and industries on the other.” (Page 51)

“…the powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.  This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.  The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.” (Page 324)

Financial capitalism, and the goals of the International Bankers created the issues that brought about the change from financial capitalism to monopoly capitalism.  Once again, from Quigley:

“The growth of financial capitalism made possible a centralization of world economic control and a use of this power for the direct benefit of financiers and the indirect injury of all other economic groups.  This concentration of power, however, could be achieved only by using methods which planted the seeds which grew into monopoly capitalism….The economic system was deflationary because power production and modern technology gave a great increase in the supply of real wealth.  This meant that in the long run the control by banks was doomed by the progress of technology.  The financial system was also deflationary because of the bankers insistence on the gold standard, with all that this implies.

“To escape from this dilemma, the financial capitalists acted upon two fronts.  On the business side, they sought to sever control from ownership of securities, believing they could hold the former and relinquish the latter.  On the industrial side, they sought to advance monopoly and restrict production, thus keeping prices up and their security holdings liquid….

“While financial capitalism was thus weaving the intricate pattern of modern corporation law and practice on one side, it was establishing monopolies and cartels on the other.  Both helped to dig the grave of financial capitalism.” (Page 337)

To sum up, the “powers of financial capitalism” pushed for the laws and practices that established monopoly capitalism in order to boost their own power.  The move to monopoly capitalism simply put the most power in fewer hands, that of the industrialists (like the Rockefellers).  Quigley sums it up:

“…As early as 1909, Walter Rathenau, who was in a position to know (since he had inherited from his father control of the German General Electric Company and held scores of directorships himself), said, “Three hundred men, all of whom know one another, direct the economic destiny of Europe and choose their successors from among themselves.”” (Page 61)

Finally, to ask some questions about financial capitalism.  Did anything good come from this, or should it be tossed altogether?  Like most aspects of life, there are seemingly good and bad aspects to this economic organization.  The middle class thrived.  1920’s America was heavily middle class.  Technology thrived in the 1920’s as well.  The automobile was mass produced.  Refrigeration (also called air conditioning) was invented.  The airplane went from a stunt machine to something useful.  The life of the common man was much better than it had been.  On the flip side, the elitist powers hit their apex of power and control.  This historically ignored problem called pride entered in, causing poor decisions which led to the Great Depression, or was the Depression a result of the poor control of the elitist powers?  What can we learn from this era?  If nothing else, I propose that for Laissez-Faire capitalism to work, it must have a people righteous enough to avoid starting combinations and seeking ultimate power.  Was not government intervention the best solution to this problem?  We will answer that as we look at Monopoly Capitalism and the Pluralist Economy.

Classic Quote

I received a classic quote dealing with the previous post:

“Many folks want to serve god, but only as advisers.”

 

The Mastery Of Opposites

It seems to be designed into life that there are principles that we must deal with, and that these principles often seem to be opposed to one another.  Some of the most heated arguments we have come in the form of trying to “balance” principles such as justice and mercy, or individual freedom and societal action.  It’s time to look closely at a number of these principles, not from the idea of “balancing”, but from the perspective that we need to master both.  In mastery, we will come to understand that such principles are not opposed, but actually work with each other to produce positive results.

Hugh Nibley touches on this subject through a good portion of his essay Zeal Without Knowledge.  It is a fascinating read as he carefully explains how our zeal can help us gain knowledge (and vice-versa) or cause us to regress in our thinking.  See: http://maxwellinstitute.byu.edu/publications/books/?bookid=75&chapid=929

Justice and Mercy

Justice and mercy are two concepts so far apart that they must be represented by two different parts of the godhead.  God the father represents justice.  He will make sure every debt is paid to the penny.  God is God because he guarantees justice in the universe.  If he didn’t insure that justice would be done, if justice were an arbitrary whim or just done at the pleasure of some supreme being, then no entity in the universe would have faith in him.  Instead, we know what we are getting with God–absolute justice.  Everyone can be assured he will guarantee that they will get exactly what they earn.

Now the unfortunate part–we all earn death.  We all merit nothing but destruction.  If we think that God the father can simply look away from the evils we have done, we are merely fooling ourselves.  Alma explains (Alma 42: 25): 

 “What do ye suppose that mercy can rob justice?  I say unto you, Nay; not one whit.  If so, God would cease to be God.” 

Alma is clear.  Each “account” will be balanced to the penny, and God can’t change the requirement, because he offers perfect justice.  There is good news.  Jesus Christ of his own free will and choice has already suffered the pains we cause.  He guarantees the repayment of all our “debts”.  He has and will make right everything we have and will make wrong.  Justice will be served, fully, by him alone.  2Nephi 2:5-7:

“And men are instructed sufficiently that they know good from evil.  And the law is given unto men.  And by the law no flesh is justified; or, by the law men are cut off.  Yea, by the temporal law they were cut off; and also, by the spiritual law they perish from that which is good, and become miserable forever.

“Wherefore, redemption cometh in and through the Holy Messiah; for he is full of grace and truth.

“Behold, he offereth himself a sacrifice for sin, to answer the ends of the law, unto all those who have a broken heart and a contrite spirit; and unto none else can the ends of the law be answered.”

We could go on for a long time about the fine points of justice and mercy, but to sum up, there is no compromise between the two.  There is no balancing act.  By virtue of God the Father and the Son, both are made perfect and work together rather than being opposites.

 Faith and Works

 Are we saved by Grace?  Is it necessary for us to do things for our own salvation?  The answer is yes.  Consider the perspective of King Benjamin (Mosiah 2:21):

“And I say unto you that if ye should serve him who has created you from the beginning, and is preserving you from day to day, by lending you breath, that ye may live and move and do according to your own will, and even supporting you from one moment to another–I say, if ye should serve him with all your whole souls yet ye would be unprofitable servants.”

So it all depends wholly on God.  Does it also depend on us?  Is that possible if it depends wholly on God?  Consider Mosiah 2: 32-33:

“But, O my people, beware lest there shall arise contentions among you, and ye list to obey the evil spirit…

“For behold there is a wo pronounced upon him who listeth to obey that spirit; for if he listeth to obey him, and remaineth and dieth in his sins, the same drinketh damnation to his own soul; for he receiveth for his wages an everlasting punishment, having transgressed the law of God contrary to his own knowledge.”

Now Alma 5: 23-25:

“Behold will they not testify that ye are murderers, yea, and also that ye are guilty of all manner of wickedness?

“Behold, my brethren, do ye suppose that such an one can have a place to sit down in the kingdom of God, with Abraham, with Isaac, and with Jacob, and also all the holy prophets, whose garments are cleansed and are spotless, pure and white?

“I say unto you, Nay; except ye make our Creator a liar from the beginning…”

It all depends on our choices.  There can be no compromise.  We need to give 100% effort to our choices and works.  We can then be saved 100% by Grace.

Desire and Gratitude

What a great problem here.  We need to learn to be fully grateful for all that we have and are, yet still desire to better ourselves.  Alma shows this beautifully in Alma 29: 1-3:

O that I were an angel, and could have the wish of my heart, that I might go forth and speak with the trump of God, with a voice to shake the earth, and cry repentance unto every people!

“Yea, I would declare unto every soul, as with the voice of thunder, repentance and the plan of redemption, that they should repent and come unto our God, that there might not be more sorrow upon all the face of the earth.

“But behold, I am a man, and do sin in my wish; for I ought to be content with the things which the Lord hath allotted unto me.”

Lorenzo Snow taught:

“You who have aspirations to be great–and there is no wrong in that–should realize…the support that you should give to those over you, so that when you are placed in responsible positions you may demand of the Lord the faith and support of the people.”

If you want to be a great leader, you need to be loyal to your leaders.  If you want to be a great teacher, you need to be a great learner.  On another note, it is interesting that Pres. Snow is also teaching about righteous self interest.  To become great is a venture of self interest.  Pres. Snow teaches that there is nothing wrong with this–evil comes when it becomes prideful, which would mean that gratitude is lost and helping others achieve is no longer the focus.  Think about it for a minute.  Aren’t we all grateful that God desired to become great?  Had he not chosen to become all he could–to become God, where would we be?  Our situation would be quite hopeless.  Instead, he shows the perfection of desire in becoming all he could, and gratitude in helping each of us learn and progress toward the same end.  Can we not apply this teaching to many different areas of life?

Profits and Charity

In our modern world we have hit a stage of pride that it’s hard to think of these two as working together, but they do.  Jacob explains (Jacob 2:18-19):

“But before ye seek for riches, seek ye for the kingdom of God.

“And after ye have obtained a hope in Christ ye shall obtain riches, if ye seek them; and ye will seek them for the intent to do good-to clothe the naked, and to feed the hungry, and to liberate the captive, and administer relief to the sick and the afflicted.”

I’ll give a couple of examples from our day.  I know a land-lord who had a tenant whose husband died.  The widow was on a fixed income, hardly able to pay full rent for the apartment.  The land-lord lowered the price of the rent as needed to help the widow, sacrificing almost all profit from the unit.  The widow kept the apartment in good condition, minimizing the costs to the land-lord.  By working together, the owner made what may be considered a just profit and the widow had a place to live.  Both were grateful for each other.

A few years back, I worked for a small business in the construction industry.  The owner was a good man, who cared for his employees.  When construction in the state suffered setbacks, the company began to struggle.  The owner put in many hours of work trying to keep everything going.  He never missed payroll.  I later learned that he worked for a full year for less than half what I had been paid to work for him.

Just as God had to become God to help us progress, so must we have something to give in order to help others.  But isn’t seeking a profit in business the same as serving mammon?  I believe it all has to do with our motives.  Just before the Savior taught that ye cannot serve God and mammon, he taught us why he puts us in the world of mammon.  Luke 16: 10-13:

“He that is faithful in that which is least is faithful also in much:  and he that is unjust in the least is unjust also in much.

“If therefore ye have not been faithful in the unrighteous mammon, who will commit to your trust the true riches?

“And if ye have not been faithful in that which is another man’s, who shall give you that which is your own?

“No servant can serve two masters…Ye cannot serve God and mammon.”

It seems we are put here to see how we will handle the necessity of making a living in “the unrighteous mammon.”  If we are faithful, and I would suggest that means just what Jacob explained it to mean, then he knows we will be faithful in great and lasting stewardships to come.  If we cheat or take advantage (leagal or not), then he knows we cannot be trusted with “true riches”.  Therefore pride is the real root we are looking for.  If we care more for ourselves than our neighbor, our pride will cause us to seek mammon at a cost to someone else (and this may well include withholding it), and we cannot serve God.  If we love God and our neighbor and ourselves, then we will handle our riches in a way that we can be trusted in any capacity.  One of the great tests of this life is being put in the “world of vanity” (as the book of Zosimus calls it), with the goal of overcoming vanity and becoming charitable.

Christlike Love and Doctrinal Correctness

Charity is the pure love of Christ.  We are to have this for all people.  On the flip side, we believe many doctrines and have many standards that are not common in the world.  Can we learn to be fully converted and devoted to living the doctrine, yet have a complete love for those who choose not to?  Can we teach this to our children?  Can we come to a perfect understanding that homosexuality will not allow for an eternal family, and cannot be accepted by the church, but love the homosexual just the same and hope that God can perform salvation for him or her, too?

Learning and Humility

This is the topic that Nibley covers so well.  He quotes Joseph Smith:

“[the people] were depending on the prophet, hence were darkened in their minds, in consequence of neglecting the duties devolving themselves.”

If we are not learning, and instead waiting to be instructed in all things, we will be darkened in our minds.  Nibley again quotes Joseph Smith:

“Soon after the gospel was established in Kirtland, …many false spirits were introduced, many strange visions were seen, …many ridiculous things were entered into, calculated to bring disgrace upon the church of God.”

Nibley explains:

“This was a time when some of the brethren in Kirtland were out to prove that they were smarter than the prophet and produced the so-called Egyptian Alphabet and Grammar, to match his production of the Book of Abraham.”

Nibley explains the conflict, and not that the real problem is our old friend, pride:

“This illustrates another point, that knowledge can be heady stuff, but it easily leads to an excess of zeal!…The University is nothing more nor less than a place to show off:  If it ceased to be that, it would cease to exist.”

Nephi explains this principle best of all.  (2Nephi 9: 28-29)

“O that cunning plan of the evil one! O the vainness, and the frailties, and the foolishness of men!  When they are learned they think they are wise, and they hearken not unto the counsel of God, for they set it aside, supposing they know of themselves, wherefore, their wisdom is foolishness and it profiteth them not.  And they shall perish.

“But to be learned is good if they hearken unto the counsels of God.”

I would love to fully understand all doctrines and mysteries and have all my questions answered.  I guess I am supposed to seek to understand and learn and come to knowledge, but I must be humble.  What if my logic brings me in contradiction with prophets and apostles?  What if I view myself as better or more knowing than others?  If this is the case, then my learning, without the proper humility could well be my downfall.  Can we learn, even great things, yet be humble when we are wrong?

Effective post/Long post

I realize I am going far into the latter, so we’ll stop here.

 

 

Industrial Capitalism

Continuing our study of the economic advances of Western Culture, we will now look at the changes that moved Commercial Capitalism into Industrial Capitalism, and the associated benefits and challenges.  Quigley sums up the transition quite quickly:

“In this second stage [Commercial Capitalism], mercantile profits and widening markets created a demand for textiles and other goods which could be met only by application of power to production.  This gave rise to the third stage:  industrial capitalism.”  (Tragedy & Hope, pg. 42)

So the major development that marked Industrial Capitalism was essentially the factory.  There was also a change in the control of the economy from the communities and states that had run mercantilism to the owners of the private firms or partnerships that produced the goods.  Along with this change in control, came a change from the conscious control of mercantilism to the automatic control (not consciously planned) known as “laissez-faire”.  Under this system, companies competed in the market place to sell goods.  Quigley explains the result of this factory system on society:

“The growth of industrial capitalism gave rise to two new classes, the industrial bourgeoisie and the industrial workers (or proletariat, as they were sometimes called in Europe)…

“Under industrial capitalism and the early part of financial capitalism, society began to develop in to a polarized two-class society in which an entrenched bourgeoisie stood opposed to a mass proletariat.  It was on the basis of this development that Karl Marx, about 1850, formed his ideas of an inevitable class struggle in which the group of owners would become fewer and fewer and richer and richer while the mass of workers became poorer and poorer but more and more numerous, until finally the mass would rise up and take ownership and control from the privileged minority….” (Pages 40-41)

The ideas of Marx, though not totally new, came about during this time in their modern form.  This is an important development, as these ideas stick with us today under various names and in various ways.   They are often presented as the alternative to the current system, which is not entirely correct, as few people understand our current situation.  To understand our current situation, as well as past situations, some reasons for Marxist ideas, as well as the reasons that many people look at capitalism so differently, we need to understand somewhat the goals and results of capitalism.  We will look at this now, though we will have to apply it differently to the different stages that capitalism went through in our society.  From Quigley:

“…Capitalism provides very powerful motivations for economic activity because it associates economic motivations so closely with self interest.  But this same feature, which is a source of strength in providing econoimic motivation through the pursuit of profits, is also a source of weakness owing to the fact that so self-centered a motivation contributes very readily to a loss of economic coordination.  Each individual, just because he is so powerfully motivated by self interest, easily loses sight of the role which his own activies play in the economic system as a whole, and tends to act as if his activities were the whole, with inevitable injury to that whole.  We could indicate this by pointing out that capitalism, because it seeks profits as its primary goal, is never primarily seeking to achieve prosperity, high production, high consumption, political power, patriotic improvement, or moral uplift.  ANY OF THESE MAY BE ACHIEVED UNDER CAPITALISM, AND ANY (OR ALL) OF THEM MAY BE SACRIFICED AND LOST UNDER CAPITALISM, depending on this relationship to the primary goal of capitalist activity–the pursuit of profits.  During the nine-hundred-year history of capitalism, it ahs, at various times, contributed both to the achievement and to the destruction of these other social goals.” (Page 43, emphasis mine)

Quigley’s definition here of capitalism, hardly complimentary, does point out what I believe to be the most important aspect of the system–economic freedom of the individual.  He points out very well that capitalism can be a good or a bad force, depending on the individuals involved.  He also points out, many times, the importance of the profit motive.  In our search for principles of the United Order, I believe economic freedom is extremely important, but our rejection of the profit motive for the most part is also extremely important.  For this reason, I generally reject the term ‘capitalism’ in favor of the term ‘free market’.  From David O. McKay:

“The fostering of full economic freedom lies at the base of our liberties.  Only in perpetuating economic freedom can our social, political, and religious liberties be preserved.”

It is interesting to me to note, that when I read of church leaders talking on the subject, they often speak of economic freedom being vital to freedom which is vital to the United Order.  I have yet to find where they encouraged capitalism as a mechanism to make us rich or that we should seek profits as our self interest.  Our interest is (or should be) in building the Kingdom of God on the Earth.

To ask the questions which I think are most vital:  Can we live in economic freedom and choose to live as God would have us live?  Or is the profit motive too enticing and we end up serving Mammon?  As we follow further developments of capitalism (financial capitalism, and monopoly capitalism), we will see that the world has often chosen the latter.  Have their been good results from capitalism in general?  What poor results have come?  How are we to act?  Should we support capitalism for the freedom aspect, or must it be replaced?  What will help us learn the mentality of the United Order?

 

 

The Law Of The Fast

In contemplating the good, the bad, and the ugly of the Western middle class lifestyle, I have come to believe that the Lord has offered us a way to take the good and overcome the bad.  This is the law of the fast.  Let me state up front that this post is just about 100% my own ideas and I wouldn’t want it to be mis-judged as commandment or coming from my church or scripture.  However, I do hope the spirit of what I share may help someone come to a greater understanding and practice of the law of the fast.

The first Sunday of each month in the Church of Jesus Christ of Latter Day Saints is known as fast Sunday.  As a fast, the members are asked to skip two meals and donate the saved money from the meals as a ‘fast offering’ to help the poor.  In this way, even those who have only enough to survive day to day create a small surplus to share with those less fortunate.  Those who are better off have been asked to contribute generously.  Marion G. Romney stated the following:

“What prohibits us from giving as much in fast offerings as we would have given in surpluses under the United Order?  Nothing but our own limitations.”

How much surplus would I have had under the United Order?  Let’s begin by asking what we are to learn from fasting.  We go without two consecutive meals (which causes many youth to call it “slow Sunday”).  We forego a comfort of life to give to others.  I believe our offering should reflect this same thing.  We shouldn’t simply give our spare change or pretend we would have eaten Corn Flakes for the meals, but the offering should reflect an altering of our life pattern.  We should give an amount that represents an actual sacrifice.

Next, we know that the United Order was to provide for the needs and wants of the people, so far as the wants were just.  Are my wants just or are they simply the reflection of the materialistic culture in which I live?  I believe the answer lies in applying the law of the fast to more than just food. 

What if I were saving up for some item at a rate of $50/month, and, when I had saved the needed money, I fasted from that purchase for a month or  two?  I could give the extra money saved as a fast offering.  By applying this spiritual principle, I would show the Lord that I cared about the needs of others and not just my own wants.  It would give time to thought and reflection and open myself to the spirit to help me understand if this item really was worth purchasing or if I was just giving in to an advertising ploy.

As I have applied this principle in my own life, I have found that many of my immediate wants are simply things that won’t satisfy and changed my mind about the purchase before gaining extra junk to sit around the house.  There was a time that, during the fasting period, an expense came up for which I needed the saved money.  I was glad I hadn’t wasted it on a toy.  Those things I have purchased have generally been useful for the purpose which I had hoped.  I like to think that they have also worked well.  Perhaps the Lord blesses us in such things if we put him first in our lives.

Finally, consider the words of Isaiah (from Ch. 58):

6. Is not this the fast that I have chosen?  to loose the bands of wickedness, to undo heavy burdens, and to let the oppressed go free, and that ye break every yoke?

7. Is it not to deal thy bread to the hungry, and that thou bring the poor that are cast out to thy house?  when thou seest the naked, that thou cover him; and that thou hide not thyself from thine own flesh?

I believe these verses show that the fast should be applied in many ways.  I believe that if we truly understand what the Lord is saying, he is revealing his way of overcoming the oppressions and inequalities of this life.  Notice how these things can be applied to both the giver and receiver in our culture:  The bands of wickedness may have caused my neighbor to lack, but the bands of wickedness may be tight around me if I give into materialism rather than care for my neighbor.  They are loosed for both of us through the true fast.  It could be a heavy burden to not have food.  Ask anyone who has owned a boat (and sold it) if it wasn’t also a heavy burden (from cost, maintenance, time, etc.).  We release ouselves from the oppression of Satan and worshipping false gods, while simultaneously releasing our neighbor from the burden or oppression of want.

Now the blessings the Lord offers:

8. Then shall thy light break forth as the morning, and thine health shall spring forth speedily:  and thy righteousness shall go before thee; the glory of the Lord shall be thy rereward.

9. Then shalt thou call, and the Lord shall answer; thou shalt cry, and he shall say, Here I am….

He goes on for five more verses of blessings you shall receive, and I highly encourage everyone to read them.  For now, just consider how amazing this promise is.  You can pray and the Lord will say, Here I am.  How often do we try and rationalize our lack of answers to prayers when, perhaps, it is our own choice to set our hearts on other things and not do what the Lord would have us do to get the answers we search.  I realize just how much I needed to write this and go through these thoughts to set my own life in better order.  I invite all others to do the same and see if we are not blessed beyond measure.  Perhaps the United Order isn’t so hard to understand or so distant.  Perhaps as we live and understand commandments in their fuller meaning it will become clear and even easy to get there!