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The Keys to Prosperity

2013 March 3
by Ian Welsh

I’ve mentioned before that I’m writing a book on how to create prosperity.   Let’s run through the basics.

First, you have to produce enough.  Goods and services.  Everything from food and shelter, to music and philosophy.

Second, because prosperity means widespread affluence, you have to take what you produce and get it to everyone or as many people as possible.

Third, you have to be sure you’re producing the right stuff – food that makes people healthy, philosophy that doesn’t turn people evil, housing that keeps people healthy and in good social contact with each other, and producing in a way which doesn’t destroy the bases of prosperity, whether that’s the soil, water and climate you need to grow food, or the ethics which make prosperity possible.

The principles behind this aren’t that difficult, really.  Use the free market for what it’s good at (creating and distributing certain types of goods and services.)  Discourage rent-seeking.  Understand that how much money people get is largely unrelated to their contribution to society.  Remove bottlenecks to growth.  Don’t destroy your sinks (like carbon in the atmosphere), don’t overuse renewable resources, understand the obsolesence of non-renewable resources.  Keep the rich poor, so they don’t buy the political system, keep influentials independent as much as possible, keep the interests of the powerful alligned with the mass of society.  Don’t financialize.

Oh, to be sure, there are technical details, but the core is ethical.  The people who make up society must want to do the right thing, must believe in a particular conception of kindness and fairness.  It is not accident that after the Great Depression and WWII, when the majority of people in the West understood, deep in their bones, that life is unfair and that group effort is what makes nations great that the great general prosperity occured. It occured because the GI generation and the Lost Generation insisted on it, voted for it, worked for it.  It happened because they believed in general welfare, in looking after the least amongst them, and in the future, not the past.

Prosperity is ethical.  The ancient Greeks had a saying which ran as follows: “a society is great when old men plant trees in whose shade they will never rest.”

To repeat, don’t let any group get too powerful or rich, make the right stuff, then distribute it.  Sometimes the right stuff should be distributed by the free market (which is kept free by very strict government oversight), sometimes it is distributed by the government, sometimes it is provided by neither but by the social sector (parenting instead of daycare.)

Again, ethics are the most important part of prosperity, just as you can’t cheat an honest man, an ethical population will create prosperity.  As Machiavelli wrote, good laws will not save bad people, and good people can make bad laws work.  Nowhere is this more evident than in the United State, and its rampant contempt for its own Bill of Rights.

As soon as people become greedy, as soon as they want much more than their neighbour, prosperity will fade.  Contrary to the mantra of the greed is good free market fundamentalists, greed is only good in moderation, and a society with many billionaires cannot and will not stay prosperous.  Once we stop caring about the sick, the poor and the prisoners, once we become mean, self-interested and judgmental, we undermine the mass participation and the kindness which is required for prosperity.

The developed world will become prosperous again when societies pull together for the benefit of all, when greed is no longer glorified and barely tolerated, and when we decide to make the right stuff, the stuff that is good for us, instead of the stuff which we know is bad for us.  And we will find true prosperity when we commit to raising everyone in the world to prosperity.  Prosperity based on exclusion, whether that exclusion is based on where you were born, who your parents were, or what attributes you won in the genetic lottery, cannot and does not last.  If we want lasting prosperity, we must all come together, with apologies to Dumas, as one for all, and all for one.

30 Responses
  1. S Brennan permalink
    March 3, 2013

    Good one Ian..

  2. March 3, 2013

    I don’t know if you’ve run across this book, but it makes some of the same points you do. They try to examine how to make an economy that maximizes happiness, or perhaps “minimizes unhappiness” would be a better way to put it. It’s a bit like how you use the concept of prosperity – make people in your society more prosperous generally, and you prosper as well. Or happier.

    To repeat, don’t let any group get too powerful or rich, make the right stuff, then distribute it.

    That’s how I’ve always felt things would work best…

  3. Formerly T-Bear permalink
    March 3, 2013

    Have question: Is this project about *Supply Side Prosperity* or *Demand Side Prosperity* or even *Utopian Prosperity* or something else entirely?

    A quick perusal gave the first impression of fuzzy feel-goodness, of musty morality and a humid hothouse-like, suffocatingly economic claustrophobia – everything pre-arranged just so. What appears to be missing is accounting for human nature as it happens; the dynamics of human nature giving life to the scheme. This project presupposes the use of power without acknowledging the nature of power or how power is used by the species or how power becomes required to function as needed.

    None-the-less I will look forward to reading your work when it is accomplished. Further reflection and consideration by this reader is required in the meantime.

  4. Ian Welsh permalink*
    March 3, 2013

    About a third of the book is the details of power (including a discussion of arms and violence), and I have one chapter on human nature written and plan at least one and maybe two more. The first link is to a draft chapter on human nature.

    You certainly aren’t going to control politicians and wealthy people w/o taking power into account. And keeping ethics in place requires both carrots and sticks.

    The book is about none of those things, T-Bear, I have my own take on what prosperity requires. Demand is part of it, supply is part of it, ethics is a big part of it, power is one of the keys, there are technicalities that matter.

    But you won’t get prosperity if the controlling forces in society don’t want it.

    Cujo: I have not, maybe I’ll pick it up. Thanks for the reference.

  5. March 3, 2013

    I’m curious as to what you think of the whole “public choice theory” idea that the libertarian right has been pushing as the reason for why we can’t have nice things…

  6. March 3, 2013

    ” The people who make up society must want to do the right thing,”

    Yes, but not necessarily because they “believe in a particular conception of kindness and fairness.” It works as well if they do it out of pragmatism, merely because they recognize that in the long run it is best for the society as a whole.

    There are those who believe that we should have universal health care because every person has a right to health care. Others believe we should do it because it is the “kind and fair” thing to do. My position is that our nation will be better off if we do it; the nation will be more prosperous and more able to maintain a stable and healthy economy. It is in our long term best interest to do it.

    Does it matter which motive is at work if the result is universal health care?

  7. BlizzardOfOz permalink
    March 3, 2013

    Interesting topic … from my narrow experience reading and talking to people, I believe a major problem is that people don’t even think that, or aren’t sure that, prosperity would be a good thing. That’s true not only of DC (may it be struck by a meteor) and the elites, who obviously don’t, or they wouldn’t be so fixed on austerity. It’s also true of regular people, and across the political spectrum.

    Lots of left-leaning people think of humans as a cancer on the planet; the (oft-unspoken) corollaries are that it wouldn’t be a bad thing if they started dying off, and in any case prosperity seems like a bad thing. Right-leaning people, well … I don’t understand them, but they seem focused on anything but prosperity.

  8. March 3, 2013

    @Bill H:

    Does it matter which motive is at work if the result is universal health care?

    Stated more generally, “…if the result is the right one.”

    Looked at from that angle, it sounds like the old “ends justifies the means” question. I know this is not exactly what you mean, but from a practical standpoint (and this is all about being practical, isn’t it?), the same analysis might be helpful.

    To me, the “practical” argument for doing the right thing is inherently fragile, and can be easily obfuscated and demagogued if the priority is upon what can be seen as practical.

    “Kind and fair,” or the ethical argument, is a more robust position – harder, perhaps, to sow and cultivate, but hardier in the face of the ill winds of politics. Especially since “the right thing to do” often requires short-term sacrifice that, again, can be used against it by those who would grasp for power.

  9. March 3, 2013

    @BlizzardOfOz:

    While I don’t think humans themselves are a “cancer on the planet,” it could certainly be said that I consider our behavior somewhat cancerous. As one who is, to put it mildly, skeptical that what is considered “prosperity” by the American/Western “middle class” to be a realistic standard of living (at least at current population levels), however, I think I can represent for that particular point of view. As Ian said:

    Don’t destroy your sinks (like carbon in the atmosphere), don’t overuse renewable resources, understand the obsolesence of non-renewable resources.

    If we mature enough to observe such bounds, then I, for one, would concede a true delight for our species.

    As to your observation regarding the right’s motivation, I disagree. They are indeed focused on prosperity, except in that exclusionary, meritocratic way. I myself cringe from the ideas of “prosperity” (and “success,” “progress,” etc.) for this reason – however not because of some sort of misanthropic death-wish. An essay like Ian’s, here, where the “right sort” of prosperity is carefully explained crushes that semantical concern, however it is worth noting that such a characterization of “prosperity” requires careful explanation in these times.

  10. John Puma permalink
    March 3, 2013

    The central tenets of the current controlling economic system, i.e. greed and ever increasing consumption, ARE “the cancer of the planet,” in the sense that the “family value” of realization of the maximum possible number of generations of families on earth is severely precluded by those tenets.

  11. nihil obstet permalink
    March 3, 2013

    What I see as missing in the western world today is any sense of goal or mission. Roosevelt’s New Deal, Wallace’s Century of the Common Man, Johnson’s Great Society argued for the value of people as individuals and as members of a good society. Reagan redefined the value of a person as his wealth or his hard obedient labor. Since most people do work hard, they were willing to latch on to the “I’m better because I work harder, but someday I’ll be better because I’ll get more than the other lazier people” mantra. That removed any vision. I don’t know how we get back to seeking to support the inherent value of the person.

  12. Ian Welsh permalink*
    March 3, 2013

    If there’s too much doing it for the wrong reasons it isn’t stable, the moment self-interest changes for key groups, it goes away.

    Mandos: I’m familiar with Arrow and Mancur Olson (in particular, Power and Prosperity). I have some sympathy for the arguments. While the mechanism they identify is inevitable, it is not inevitable that it be the most powerful mechanism in society.

  13. Alcuin permalink
    March 3, 2013

    Ian,

    I’m currently reading Polanyi’s The Great Transformation. I’m fascinated by the way he teases out the differences between markets and a market economy. He grounds the rise of the capitalist system in the writings of Adam Smith and says that the market economy is a totally unnatural way of ordering societies. His book is filling in a lot of holes for me. I now know what liberalism is – it isn’t what I once thought it was. He also makes it clear that writers as diverse as Wendell Berry, John Holloway, and Vandana Shiva are conservatives. For more on that, you might read an essay by Chet Bowers, Some Thoughts on the Misuse of Our Political Language. Market Liberals are Republicans (neo-liberals) and Social Justice Liberals are Democrats. But both are equally responsible for the straits that we find ourselves in. True conservatives conserve – what passes for conservatism these days is, in fact, neo-classical economics.

  14. Ian Welsh permalink*
    March 3, 2013

    Polyanski is in my big pile of books to read, fairly close to the top.

  15. March 4, 2013

    Ian, you might also want to take a look at Galbraith’s The Good Society and also C. Wright Mills’s The Power Elite. They are remarkably prescient about current events.

  16. March 4, 2013

    @Petro, How in the world did you come up with “the ends justify the means” out of what I said? I said nothing even close to that. I was referring to motives, not means, and the motives were were a choice between seeking social justice versus a desire for a better society, for God’s sake. And how, Ian, does that lead to a comment about doing things “for the wrong reasons?” Is this even a serious discussion, or just a platform to stomp on somebody’s commentary?

  17. Ian Welsh permalink*
    March 4, 2013

    Fair enough Bill. What is a better society? Because a libertarian, for example, would say that a better society is one in which the government doesn’t tax him or her to pay for universal health care.

    People have different visions of what a better society is, which is why I feel it is necessary to define what sort of society we want.

  18. EverythingsJake permalink
    March 4, 2013

    How will the current finanical elite be compelled to participate? I’m not sure shunning is enough.

  19. Clyde permalink
    March 4, 2013

    “The developed world will become prosperous again when societies pull together for the benefit of all”

    I’m not convinced of this at all.
    The damage has already been done. It is too late. The basis of human prosperity on Earth, i.e. a stable climate, has gone.

  20. Celsius 233 permalink
    March 4, 2013

    Clyde
    March 4, 2013
    “The developed world will become prosperous again when societies pull together for the benefit of all”
    I’m not convinced of this at all.
    The damage has already been done. It is too late. The basis of human prosperity on Earth, i.e. a stable climate, has gone.
    ~~~~~~~~~~~~~~~
    I’m inclined to agree. The planet will survive and thrive, but not with us as the dominate species…

  21. Celsius 233 permalink
    March 4, 2013

    Argh! Dominant. Nuts…

  22. March 4, 2013

    Well, Ian, what I said in my original comment was universal health care. I guess you’re right, that would not be better if we have to pay for it, which is the predominant American thinking of today. We want things but we don’t want to be required to pay for them. A better society would be one in which we have universal health care, first responders who are never seen but respond in seconds when you call, free food and transportation, and only those with incomes over $1 million pay taxes, preferably at a 98% rate.

    Ten year old children want things that they don’t have to pay for, but adults usually recognize that there is no free lunch. Americans…

  23. March 4, 2013

    Sorry, @Bill H – You posed a question, however rhetorical, and it set me to thinking aloud. It’s a good question – there was no adversarial intent.

    @Petro, How in the world did you come up with “the ends justify the means” out of what I said?

    At the risk of stomping on another rhetorical question :) , any discussion of “motives” in this context rings as potential talking-points towards motivating action by the “masses,” for lack of a better word. Talking points, propaganda, a proposal for motivating others towards one action or another – these are the “means” by which I would persuade.

    Of course you are right about a distinction between means & motives – and sorry that my conflation of the two took your observation a bit “out of the box.” I’m convinced that it my point is worth considering, however.

  24. Ian Welsh permalink*
    March 4, 2013

    Ah, yes, this is why people say not to read comments. Thanks for the reminder Bill. “A libertarian would say” is clearly what I think, because I’m clearly a libertarian.

  25. Celsius 233 permalink
    March 4, 2013

    Here’s a link to the last 10 minutes of Amy Goodman’s Democracy Now for Monday.

    http://www.democracynow.org/2013/3/4/municipal_broadband_networks_bridge_the_digital

    Very relevant to this thread with some amazing commentary on the control of BB Internet accessibility and how it affects communities directly, financially.

  26. March 5, 2013

    Sorry Ian, my response was not intended to be directed at you, but clearly it came out that way. My bad, I know you better than that. There has been too much bellowing about the “sequester” and the taking away of the slop in the American feeding trough lately, with great cries of replacing it with “tax the rich” so that somebody else pays for it. I have vented my spleen on a couple of posts at my place the last couple of days and you, quite unjustly, got caught up in my slipstream.

  27. Ian Welsh permalink*
    March 5, 2013

    Thanks Bill.

  28. TW Andrews permalink
    March 5, 2013

    I don’t disagree with anything there, but to some extent (and as you yourself point out), it’s a bit obvious that if you want a good society, have good people.

    I think a more important question is “what are the conditions that produce good people, and how do we foster them?” I don’t think that sending every other generation through disaster equivalent to the Great Depression or WII is probably the right way to go.

    So absent disasters of national or global scope, in the face of which people pull together or are ground under, how do we get the ethical society that produces prosperity?

  29. Solar Hero permalink
    March 6, 2013

    Or, better than the Dumas quote, “from each according to ability, to each according to need.”

  30. Jim Shannon permalink
    March 10, 2013

    You forgot the Fourth and most important issue!
    Fourth – you must have a tax code which prevents greed from corrupting prosperity for ALL!

Comments are closed.