Malvasi – Consumer Credit Society Impoverishes Wealth And Soul

Mandeville, LA – Exclusive Transcript – “According to the Reuters News Agency, the Sparkasse Bank in Chemnitz recently issued a MasterCard adorned with the hoary visage of Marx himself. So, now you can get a MasterCard Karl Marx edition. Doesn’t this play right into Marx’s adage that the capitalist would sell the very rope that would be used to hang himself?”  Check out today’s transcript for the rest…

Begin Mike Church Show Transcript

Mike:  Mark Malvasi, writing at The Imaginative Conservative under the title “The Fable of American Prosperity”:

[reading]

Following the Second World War, Hayek tried in vain to warn Western capitalists that they had set themselves on the “road to serfdom” at the very moment when the West stood on the threshold of unprecedented economic affluence, which would have been impossible without the intervention of government. At the turn of the twentieth century, the financier J. P. Morgan had quipped that those concerned about the price of a yacht couldn’t afford one. Decades before I went to work in the steel mill during the late 1970s, steelworkers, like truck drivers, plumbers, electricians, and other workingmen, could afford speed boats and fishing vessels, if not yachts, second and even third vehicles, summer homes, and Caribbean vacations for their wives and daughters, during which time many lavished expensive attention on their mistresses, all pleasures reserved for the well-to-do in a bygone era. Karl Marx got it wrong, but so, too, did Friedrich von Hayek. Marx predicted that as capitalism advanced, the number of poor would grow and the number of rich diminish, inflicting ever more cruel torment on the masses. In the twentieth century, even before the Great War, the opposite was happening. Increased wealth, much of which finding its way into the hands of workers, helped to dissolve class barriers and to make possible upward social mobility.

When prosperity returned to the United States during the 1950s, it seemed widespread, enduring, even permanent. It wasn’t. An important point of contention in the presidential campaign was whether Barak Obama or Mitt Romney had the best plan to revive the economy. The concerns were, and remain, serious and the efforts of both candidates were no doubt sincere, but the debate as it was conducted was irrelevant, for it neglected a more basic condition: the fable of American prosperity. [Mike: Folks, this is where the Hayekians out there, if you’re driving, pull over; if you’re standing, sit down. You’re not going to like this.]

The most significant development in the lives of many Americans, to say nothing of hundreds of millions around the world . . .

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Mike:  Let me stop right here.  I wish he would have gone a little farther and brought Wilhelm Roepke into this.  Unlike Hayek, Roepke did warn, not only about the road to serfdom, but Roepke warned about the excess of consumerism or the excess of consumption, that a capitalism that was not bridled by a moral tradition would produce the kind of society that we have now successfully produced, and, apparently from all indications, want to reproduce.  Hell, we’d like to have it on steroids, especially if you listen to the political class.  We don’t consume enough.  We don’t eat enough, we don’t buy enough, we don’t travel enough, we don’t do anything enough.  We don’t have enough second televisions, we don’t have enough second DVRs, we don’t have enough second iPads lying around.  We’re not content with the smartphone that we have.  We have to take that one and throw it in the junk pile so we can go buy another one.  [mocking] “That’s got 5G in it and extra memory.  It does this and that.”  There is no end to this, none.

It is that pursuit that Malvasi has tapped into in the remainder of this essay here.  Again, whenever this comes up, I think the people, including myself — of course, some of you are going to call me Luddite.  That’s okay, I’ve been called worse.  [mocking] “Why don’t you get with the times?  Come on, technology saves everybody.  Technology rocks.  Consumerism is the way to go.”  Yes, it has produced such a wonderful outpouring of wonderful Christian souls.  That’s Malvasi’s point here.  Having said that, we can continue with “The Fable of American Prosperity.”

[reading]

The most significant development in the lives of many Americans, to say nothing of hundreds of millions around the world, during the second half of the twentieth century was the advent of mass consumption. This phenomenon had its origins not chiefly in the surge of real wages but rather [Mike: This is where it gets tricky, folks.] in the expansion of credit from which even former communists are no longer immune. According to the Reuters News Agency, the Sparkasse Bank in Chemnitz (formerly that bastion of East German socialism, Karl-Marx-Stadt) recently issued a MasterCard adorned with the hoary visage of Marx himself. [Mike: Now you can get a MasterCard Karl Marx edition. Doesn’t this play right into Marx’s adage that the capitalist would sell the very rope that would be used to hang himself?] You can use it when you’re short of Kapital or are in the Red. “There is a spectre haunting Europe–the spectre of high interest rates. . . . Debtors of all countries unite! You have nothing to lose but your irksome monthly payments and a good credit score to win!”

As perplexing as is the existence of a Karl Marx MasterCard for those of us who wish the world to make sense, it highlights a more troubling reality in a global consumer economy dependent on credit. Already by the 1960s, Americans were experiencing discontent amid their plenitude, though few of them knew how to articulate these feelings. Permit me to suggest that such unhappiness emerged because the consumption of goods had become more vital than the ownership of property. The dominance of consumption engendered a sense of the pervasive impermanence of things, since the act of consuming involves the disappearance of matter. We thus live not in an “acquisitive,” or an “affluent,” or even a “materialist” society, for none of these adjectives describes the millions of consumers who now discard things as rapidly as they buy them. [Mike: Boy, isn’t that true? How many things are now made out of plastic, cheap plastic, so you can discard them? I don’t need to keep that piece of plastic around, just chuck that joker in the trashcan.]

At the same time, poverty is still with us–the old-fashioned poverty in which people don’t have enough money to spend or enough food to eat. Statistics from the Census Bureau released in July, 2012 disclose that poverty is approaching the levels of the 1960s and predict that the poverty rate will reach 15.7 percent by the end of the year. The waning interest in durable possessions and the mounting frustration with consumption, meanwhile, have bred a new poverty that is not material, but social, psychological, and spiritual. [Mike: There is a poverty of spirit out there, let me tell you.] Against that predicament Romney’s devotion to the free market, President Obama’s faith in the administrative state, and all the Karl Marx MasterCards in the world will be of little use. Even once prosperity returns, restlessness, disillusionment, and anxiety will linger.

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Mike:  Another warning and another fine essay about how the unrequited pursuit of acquiring material things so that they can be immediately used and then discarded in a never-ending, self-perpetuating cycle.  Somebody is going to be a wise butt, [mocking] “What about food?  You use and discard food.”  Yeah, but you get subsistence out of that.  You have to have food.  You can say the same thing for water or breathable air.  [mocking] “What about air?  We use and discard that.”  Well, actually, it’s kind of a cyclical thing.  You could say the same thing for water.  What he’s talking about is just consuming things for the sake of consumption, and wanting to have things for the sake of wanting to buy them, not needing to or wanting to own them and care for them, but of just wanting to acquire them.

As he points out, even the former Russian Communist will now have access to cheap, central bank-funded credit.  You can go out there and buy whatever you want today and don’t worry about having to pay for it, in other words.  Paying for it, come on, man, that’s 1940s there.  You don’t pay for things anymore; you just charge it and then you pay it off.  Then the process of denial and to delay something until it is possible to acquire is something that we, for the most part, don’t have to deal with.  You don’t have to wait to go buy a new car if the old one is on the fritz, even if you don’t have the money to do it.  Somebody will loan it to you, and they’re not even really loaning you their money.

End Mike Church Show Transcript