Welcome to another edition of the Mueller Report!
All our kids love to climb. And the older two love to read. This picture encapsulates both those loves.
It has been unseasonably warm here in the northeast. It’s supposed to reach 80 degrees on a couple days next week – this in the middle of October! Perhaps the planet really is warming. I won’t write at length about this now, but I’ve long been a skeptic of climate change (or rather, a skeptic of proposed policy to “combat” climate change). I am still a fierce skeptic of most policy recommendations, but I have been moving towards the lukewarming position of Matt Ridley.
On the docket this week:
· Reflections on spiritual disciplines in the Christian life,
· Mercantilists versus Adam Smith and the free traders
Spiritual Disciplines
I am drawing from three main sources as I teach a ten-week program on the spiritual disciplines:
· The Spirit of the Disciplines by Dallas Willard
· Celebration of Discipline by Richard Foster
· Spiritual Disciplines for the Christian Life by Don Whitney
Willard’s book has changed how I think about the spiritual disciplines and the Christian life the most. He asks the question, which I think many of us share, why do so many Christians’ spiritual lives seem anemic? That is to say, why do cultural and political forces seem to have so much sway over Christians? Why are so many Christians shaped and formed by the world far more than they are by Scripture and by the Holy Spirit?
Perhaps that claim seems a bit harsh or judgmental – yet I speak from personal experience as well as from significant observation of many individual Christians and of Christian leaders and institutions.
Willard argues that the habits of our lives are the problem. We tend to think that following Christ is primarily about making the right “choice” in the moment; some kind of act of will like turning the other cheek when we’ve been wronged. In the 1990s it was trendy to say “what would Jesus do” (WWJD) and expect that asking the question would help us make the right choice.
I don’t mean to suggest that we do wrong by asking that question. I’m sure it does some positive good. But Willard argues that such an approach to the Christian life will fail to create any meaningful transformation, spiritual discipline, or endurance in the faith. The better question to ask is: “how would Jesus live?”
Consider the analogy of Jesus as a star athlete at the top of his game. We are called to become like him, though we are not star athletes ourselves. The mistake so many Christians make, in Willard’s view, is to confuse the performance of a star athlete during a competition with that star athlete’s way of life.
How successful would we be if we simply copied the stance, equipment, or game day routine of the star athlete? Those things may help a little, but they are not what made the athlete a star. Instead, it was his way of life – most of which is mundane and repetitive – that made him into a star. His diet, the sprints and exercises, the repetition, the study, in effect the practice of his craft. The star athlete’s performance in the game is merely an overflow or an expression of who they have become through years and even decades of practice and training.
Consider the Sermon on the Mount. If we read it simply as a set of practices or decisions that we need to make, we are likely to be discouraged and unsuccessful. The activities are difficult. The standard is perfection. How can we do the things Jesus asks of us? Asking WWJD is simply not going to cut it most of the time.
But if we read the Sermon on the Mount as illustrative of the life of God manifest in believers, things change. It is no longer about making difficult decision after difficult decision – trying to live up to this impossible standard choice by choice. Instead, what Jesus says becomes the goal and the barometer of how well we are being conformed to Christ in the rest of our life. Are you turning the other cheek? Are you letting your yes be yes and your no be no? Do you give generously without expectation of return?
If the answer is no, the solution is not to just start doing those things or ask WWJD. Rather, if we are not doing these things, we should reflect on the habits and patterns of our life. This is why Paul and other New Testament authors repeatedly exhort us to keep a careful watch or to make a careful examination over our lives. Are we regularly reading and meditating on God’s Word? Are we praying fervently? Do we worship regularly in fellowship with others? Have we sacrificed our pleasures and our leisure to seek the Lord and to obey his commands? Are we living like Jesus would all the time?
For Willard, the disciplines are methods or practices done by Jesus himself. They are a primary means by which we grow to become like Christ; or rather, how the life of Christ grows and manifests itself more in everything we do.
Let me stop there and highly recommend you pick up a copy of Willard’s book if you haven’t read it – or email me and I can share a chapter or two with you. I may write other thoughts on specific spiritual disciplines and how to practice them in later editions.
Mercantilists vs. Adam Smith and the Free Traders
The discipline of economics arises in large part as a response and as a criticism of the political economy practiced by most European governments for hundreds of years prior to the 19th century. These practices generally fell under what we call Mercantilism today. The primary goal of Mercantilists was “to build a powerful and wealthy state” by having a positive balance of trade (exports greater than imports) and large domestic industries.
The thought was that countries with a positive balance of trade had to have large manufactures to produce goods for export. These countries also had inflows of gold in exchange for the goods they exported. Mercantilists believe that gold (and silver) flowing into one’s country improved your position on the international stage. You had more money to spend on waging war (hiring soldiers, buying equipment, outfitting fleets, etc.). And even better, your rival trading partners had less gold and silver in their countries, reducing their capacity to wage war.
As you can see from this brief description, mercantilism sees international trade, and the advancement of national interests, as a zero-sum game. If someone is winning at trade, someone else is losing. What is good for English national interests is bad for France’s, and vice versa. This system fits a world of antagonistic feudal or monarchical rulers constantly jockeying for position. It fits a world with countries often at war with one another.
But that does not mean mercantilist policies are good for ordinary citizens, or even that they are the best way to advance national interests in the long run.
Smith’s book, An Inquiry into the Nature and Causes of the Wealth of Nations, contests the mercantilist position. He points out, for example, that focusing on the quantity of gold and silver in a country, or even in the national treasury, is not the best measure of its ability to wage war or exert influence on the global sphere. After all, soldiers do not shoot or wear silver and gold. They can’t eat it. Ships are not built out of it. Governments would buy all those things with gold and silver, but at what price? Successfully outfitting an army or navy is not simply a matter of having hard currency. It is also a matter of having access to the real materials used in war. And in fact, it is more important to have the materials and the capacity to build armaments, than to have gold and silver. Let’s just say that the dramatic success of the United States in influencing the outcomes of both world wars had fairly little to do with its stockpiles of gold, silver, or other forms of money.
The same is true of what constitutes real wealth. We all think of having money as a sign of wealth because we take for granted that money can readily be converted into whatever we desire – cars, houses, clothes, food, etc. But the goods themselves, and access to them, are the real wealth. A government being flush with gold and silver in the 17th or 18th centuries was not particularly closely related to ordinary citizens’ access to goods – with France under Louis XIV and Colbert as perhaps the starkest example. The impressive wealth and luxury of Versailles was in sore contrast with French peasants and laborers.
In fact, various trade restrictions and domestic subsidies in pursuit of a positive balance of trade actually worsened this divide. It made most ordinary goods more expensive than they otherwise would be for the poor, while lining the pockets of politically connected merchants and nobles whose industries were “essential” for the national interest or pride. Smith goes so far as to question whether the extensive colonialism of the European powers actually made those countries richer. It certainly made the British East India Company richer while providing lucrative job posts in far flung regions. And there is no doubt that it brought a steady flow of resources and luxuries from all over the world into Great Britain. But what about the massive expenditures to maintain the British navy and army to protect the Company’s interests in India and other colonies? Were small farmers or day laborers really better off, on net, when including the cost of their taxes?
Mercantilism served the interests of the powerful, wealthy, and politically connected in a country – not the interests of the majority.
Much more could be said about this, but I will conclude with an important technical critique of the Mercantilist goal of maintaining a positive balance of trade to accumulate hard currency (gold and silver, also known as “specie”): the price-specie flow mechanism.
David Hume gets the credit for first developing a model for how trade imbalances and gold flows work. His argument is quite simple, and echoes some of the insights from Spanish scholastics in the sixteenth and seventeenth centuries. The argument begins with the claim that the prices of goods across the economy are directly connected to the abundance of money. If the cash held by everyone in the country magically doubled over night, they would not all magically be twice as wealthy. There would be no more houses, food, shoes, etc. than before, just more money to buy them with. Which means, assuming no trade with other countries, the prices of all those things must double.
A positive balance of trade has the exact same effect.
When a country exports more goods than it imports, the difference is made up by flows of gold in payment for the goods being exported. That increases the quantity of gold (money) in the country, which puts pressure on prices to rise. The larger the positive balance of trade, the greater the pressure. Which means that Mercantilism is self-defeating. The more successful a country is at accumulating gold and silver, the more their domestic prices will rise even as the prices in their partner countries fall.
As a country’s domestic prices rise, their merchants will cut back on how many domestic goods they buy and increase how many foreign goods they buy. At the same time, the merchants in countries with a negative balance of trade (a trade deficit) see their domestic prices falling – leading them to buy more goods domestically and fewer goods from abroad. For the original country with the trade surplus, they will see their exports falling and their imports rising. The trading partner country will see the opposite.
The obvious conclusion drawn by Hume is that trade imbalances naturally create pressures that reverse the imbalance. The larger the imbalance, the greater the pressure of reversal. The policy implication that Hume spells out (and Smith echoes in WN), is that the quantity of money in a country need be no concern of governments, just as they shouldn’t concern themselves about the quantity of shoes or jackets or pots or pans. Money in the 18th and 19th centuries was a good just like all other goods – regulated by the laws of supply and demand and subject to market forces.
Things are a bit more complicated today because national currencies are no longer backed or tied to gold. Although the logic of trade flows still applies, every country can now increase the supply of their domestic currency as much as they wish. As I tell my students, central bankers broke the price specie flow mechanism when they meddled with the gold standard between WWI and WWII.
But that is a story for another time.
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Talk to you next week.