Overrated Auroville: Critical Reflections on an Experimental Community in India

This morning, I came across a video praising a township in India that "lives without politics, religion, and money."  Although I admire the town's economic philosophy, the video overlooks some serious reported problems with the Auroville experiment.  A writer for Slate argues that, despite "innovative stuff" happening there, there is a "limited supply of water, an unsustainable economy, tangles of bureaucracy, secreted money, and no way to keep record of it all."  Even more disturbing is a BBC report on allegations of sexual exploitation of children.  Says one local, "They are allowed to get away with whatever they like, including paying our children to have sex with them, and we are powerless to complain."

But it's not just crime, corruption, and pedophilia that concerns me about this aspiring utopia.  There are also problems with the concept of a "religion free" community.  It seems to me that such a community (at least one that allows for procreation) is an oxymoron. Those born into it will eventually ponder the "big questions".  Some will conclude, on the assumption which is so characteristic of modern society that anything that transcends human comprehension must be false, that all religions are nonsense.  Others will humbly reject this arrogant assumption and may be drawn to a particular religion.  The latter will not experience the community into which they were born as free, but to some extent as repressive.  They will recognize that a "religion free" community is as absurd as one that is "meaning free", "peace free", "happiness free", and "freedom free".  Of course, I am not aware of the extent to which religion is discouraged in this community.  However, a place that explicitly markets itself as being "above all creeds" doesn't appear to be a very hospitable place for sincere religious seekers.

A Brief Defense of Economic Democracy

My case for economic democracy rests on two straightforward propositions.  First, those who participate in, or are affected by, a particular activity ought to have a say in how that activity is performed.  For simplicity’s sake, I will call these “activity-relevant people”.  Take the example of a socially considerate smoker who only smokes when alone and at a safe distance from those who’d otherwise be affected by the second-hand smoke.  Since there’s only one activity-relevant person in this case (i.e., the smoker), no one other than the smoker has the right to make decisions regarding this activity.

The second proposition addresses the procedural question of how these decisions are to be made.  It’s the basic principle that all men (and women) are of equal worth, which implies that all activity-relevant people are to have an equal say in how that activity is performed.  In other words, these decisions are to be made democratically (of course, in cases where there’s only activity-relevant person, he is both the “dictator” and the “democratic majority”), and the justice of any activity is measured by the degree to which they are.

The sort of activity I’m concerned with in this essay – macroeconomic activity –involves, by definition, the participation of many people, from the wage laborer struggling to make ends meet to the owners of productive property.  Since many in our ruling class recognize the intuitiveness of the first proposition, they are keen on perpetuating the myth that our economy’s fate depends entirely upon them (i.e., the “job creators”).  Yet as Abraham Lincoln famously remarked, “Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.” 

Now, labor forms the vast (and therefore the democratic) majority of our society, and they are certainly not given the higher consideration.  If public opinion research is any indicator, then we appear to be subconscious social democrats, although public policy clearly doesn't reflect public support for, among other things, a more equitable distribution of wealth. Indeed, it has been statistically shown that politicians respond only to the policy preferences of the proverbial 1%(see pp. 110-114 of Hacker & Pierson's "Winner-Take-All-Politics"), not those of the average activity-relevant person.

What’s the solution?  Am I calling for a socialist takeover of our economy?  I’m arguing over decision-making procedures, not the content of those decisions.  If a democratic society were to organize its economy along libertarian lines, it wouldn’t contradict my argument in the slightest…although I would certainly be a minority there. 

Does Welfare Restrain Innovation?

The notion that social welfare stifles innovation seems to be a conservative article of faith. The logic is fairly straightforward, and proceeds from the simple fact that social welfare spending is financed largely by taxes. The amount at which, say, Susan is taxed is inversely proportional to the monetary rewards she should expect from investing her creative energies and, accordingly, her incentive to do so. In short, higher taxes lead to fewer entrepreneurial activities.

While I remain open to this theory, I have seen no evidence to corroborate it. Indeed, annual reports of the Global Innovation Index (GII) have listed European states renown (or, here in the U.S., maligned) for their generous social welfare spending as among the most innovative, and several of them have outranked the U.S. The table below lists the ten most innovative countries, according to the 2011 GII.

Of course, these results do not, in themselves, prove that welfare generosity enhances innovativeness. They do, however, contradict the idea that it necessarily restrains it. Greater equality and innovation do not appear to be mutually exclusive.

Orthodoxy and Capitalism: Towards a More Balanced View

The following is a brief response to Dr. Banescu's discussion on capitalism and its compatibility with Orthodoxy in The Illumined Heart, a wonderful podcast on Ancient Faith Radio.

Impact of the Welfare State on Living Standards

Dr. Banescu claims that social democratic countries are associated with lower living standards. However, there is an abundance of empirical research that reveals the contrary. Below is a sampling of recent findings:

1.) Leftist political institutions reduce relative poverty (David Brady, 2003, “The Politics of Poverty,” Social Forces, Vol. 82).

2.) Social-Democratic welfare states prevent income poverty (Muffels & Fouarge 2004, “The Role of European Welfare States in Explaining Resources Deprivation,” Social Indicators Research, Vol. 68).

3.) Public entitlement programs reduce both relative and absolute poverty (Scruggs and Allan, 2006, “The Material Consequences of Welfare States,” Comparative Political Studies, Vol. 39).

4.) The welfare state enhances life satisfaction (Pacek & Radliff, 2008, “Assessing the Welfare State,” Perspectives on Politics, Vol. 6)

Capitalism and its Relationship to Theism

The U.S. is unique among advanced industrialized democracies both for its high degree of religiosity and its highly capitalistic economy. Dr. Banescu assumes that these unique qualities must be causally related. In other words, there is something inherent in capitalism that enhances or sustains the level of religiosity in a country. This may or may not be true, but it strikes me as a theoretically-undeveloped thesis (as a social scientist, I could never get away with arguing that two or more variables are causally related unless I could explain that relationship theoretically).

I saw no mention of alternative explanations, such as the following two (I quote these verbatim from U.S.A. Today, which reported on a recent AP-Ipsos poll):

1) “Many countries other than the United States have been through bloody religious conflict that contributes to their suspicion of giving clergy any say in policy.”

2.) “A long history of religious freedom in the United States created a greater supply of worship options than in other countries, and that proliferation inspired wider observance.”

The posited relationship between capitalism and theism reminds me of the inverse relationship between the latter and I.Q. (of which many atheists are so fond), and I find both to be spurious. On the contrary, I believe a case can be made for a relationship between capitalism, on the one hand, and secularization and immorality, on the other (please take this with a grain of salt, though, since I don’t have time to elaborate on this argument here).

Orthodoxy and Capitalism

If I remember correctly, Dr. Banescu argues that although the Byzantine Empire behaved in ways analogous to the modern welfare state, we mustn’t forget that it was also capitalistic. Yet this is less of an argument than it is a matter of grammatical preference. After all, one wishing to enhance social democracy’s appeal could simply argue in the reverse; that is, although the Byzantine appear was capitalistic, it also behaved in ways analogous to the modern welfare state. Indeed, Nikolas Gvosdev (Emperors and Elections: Reconciling the Orthodox Tradition with Modern Politics, Troitsa Books) notes “parallels between the principles espoused by the Byzantines with the operations of the modern welfare state” (p. 130). Gvosdev goes so far as to argue that there is “a tendency within Orthodox economic thought that lends support to socialism, based on conciliarism” (p. 128).

“Creating Value”: Dispelling the Nature Myth

Imagine yourself instantly transported to a plot of land dotted with apple trees. The fruit of this land is available to all who are willing to work for it. Suppose you expend the effort to pluck two apples from one of the trees. The enjoyment of those apples is the natural consequence of, or reward for, your labor. And if someone were to come along and take an apple or both against your will, he would rightly be accused of stealing. The proponent of laissez-faire capitalism likens this to the state of affairs in a “free” market economy. One’s wealth is imagined to be the direct, natural, result of his personal efforts alone. To the very last penny, one’s wealth is believed to measure the extent of his labor with the same precision that a thermometer gauges the temperature outside. Hence, to take any portion of that wealth (i.e., in the form of taxation) would be tantamount to stealing. This explains why, of the three possible ways “of creating and obtaining value”, Dr. Banescu places taxation in the same class as stealing.

However, wealth accumulation in a capitalist economy is quite different from picking apples. In reality, “wealth is not simply the result of an individual’s efforts, but exists within the context of a larger community which has supported and protected these efforts” (Gvosdev, p. 125). Further, the government (far from being the enemy of laissez-faire mythology) is the instrument through which these efforts are supported and protected. If government policy benefits the wealthy, and if wealth production is a collective effort, why should it not also benefit the working class? The individualism that pervades our culture encourages the myth that the rich C.E.O. arrived at his position on the basis of his personal efforts alone, as if workers are no more deserving of credit than a conveyor belt.

Orthodox Christianity And Capitalism

Here's a little blast from the past - an interview with Kevin Allen, host of the Illumined Heart (on Ancient Faith Radio). I engaged both Kevin and Fr. John Whiteford in a discussion on the compatibility of capitalism with Orthodoxy Christianity. Kevin provides the following synopsis of the episode:

The previous podcast on this subject stimulated comments about whether we covered the bases on this issue fully or dispassionately enough. In this conversation, Fr. John Whiteford (ROCOR) priest and frequent conservative commentator and blogger, and Dr. Amir...(ROCOR) layman, political science lecturer, and self-described “social democrat,” talk about poverty, the welfare state, whether alms-giving is spiritually effective if government mandated, and the best way to live out the Orthodox Christian life in the world.

Hmm…why wasn’t Fr. John introduced as a “self-described” conservative, and why is social democrat enclosed within quotation marks? Oh well…

Click here to read follow-up comments.

Reflections on my Discussion with Kevin Allen and Fr. John

I, along with Fr. John Whiteford, was recently a guest on Ancient Faith Radio’s Illumined Heart podcast. The episode revisited the subject of capitalism’s compatibility with Eastern Orthodoxy (click here for the essay which prompted the invitation to appear on the show). In this short essay, I share some reflections on what was a very lively discussion. As one who is sympathetic to social democracy, I knew that I would regularly be at odds with Fr. John, a conservative. I must confess that I almost wish Fr. John was less pleasant than he is, since it would be much easier to continue disagreeing with him, as I do below.

Poverty

Obesity
Fr. John argued that the problem of poverty in the U.S. is not as severe as the Left suggests, and he points to America’s obesity rate as evidence. Rising obesity, it is assumed, necessarily means that people have more money to increase their food consumption. However, obesity does not merely indicate the quantity of food that is consumed, but also its quality. While conservatives often over-emphasize individual choices in explaining poor diets (and, to be fair, many on the Left are vulnerable to the charge of overstating structural factors), the reality is that the quality of one’s diet is significantly determined by income (along with genetics and other factors). As one writer put it, “…when a head of broccoli costs three times as much as a McDonald’s double cheeseburger, the whole notion of consumer ‘choice’ becomes suspect.” It is, therefore, no coincidence that the urban poor are disproportionately represented among the obese in our country.

Quantifying the Working Poor

After citing a statistic on the number of Americans from working class families who were living in poverty, I was asked whether that figure included the number of illegal immigrants. Even at present, I’m still not quite sure (I’ve yet to receive a response from the Working Poor Families Project, which furnished the data). Yet I’m also unsure as to whether that even matters. Working poor is working poor - “alien” or otherwise. If illegal immigration were as economically burdensome as many claim, then the government should do more than pay lip service to the need to protect our borders, as well as to punish those businesses whose willingness to recruit undocumented workers incentivizes those living across our borders to enter our country illegally.

Even if we exclude illegal immigrants from this estimate (as if sub-living wages for them are somehow more acceptable), the number would still be intolerably high. Yet as far as I’m concerned, even if one persuasively argues to the contrary, he would actually be undermining the conservative perspective. After all, the smaller this figure becomes, the more difficult it is to convincingly argue that mitigating this problem is impractical. It would do more to support my case if one were to discover that the true number of impoverished Americans from working class families is 22 thousand, rather than 22 million.

Alternative Explanations

I sampled recent scholarly research on the positive effects of social democracy on several measures of subjective and objective well-being. However, at least three factors were offered to downplay social democracy’s role in enhancing living standards. I address each of these below.

Oil and Inequality

Using the Gini coefficient as a gauge, I presented solid evidence that social democratic welfare countries (SDWCs) produce lower levels of inequality than do the more capitalistic ones. In response, it was countered that Norway’s large oil revenues (and not its welfare system) explain its lower GINI score. The obvious rebuttal, however, is that oil fails to explain the much lower Gini scores in Denmark (24.7), Sweden (25), France (32.7), to name but three countries whose welfare spending is often targeted for criticism.

Population

According to the familiar population argument, the U.S. can’t be compared with SDWCs because the latter are much smaller in population, and thus have fewer people on whom to spend welfare (let’s ignore, for the sake of argument, that conservatives are often eager to embrace findings from comparative research that support their conclusions). One basic flaw in this argument is that it focuses on the total number of welfare recipients, rather than their share of the total population. Let’s say, hypothetically, that the number of welfare recipients in the U.S. is 30 million. Moreover, let’s assume for simplicity’s sake that they, themselves, don’t contribute - even in the smallest of ways - to America’s welfare apparatus. In one sense, 30 million is a large number (it’s roughly the size of Afghanistan). In a country like France, where an impoverished population of 30 million would constitute almost half of its total population, it doesn’t appear remotely possible that an effective welfare state could be sustained. However, as a share of America’s population, that would amount to approximately 10%, which means that there would be a much larger 277 million people among whom the financial burden of sustaining the welfare system would be divided (I entertain no delusion that all would end up sharing the burden equally, of course).

Hence, we are left without a proper explanation as to why population should matter. We may discover that Norwegians consume more cheese than Americans (I have no data on cheese consumption, mind you), though we wouldn’t entertain the possibility that cheese consumption is responsible for their different levels of inequality. This is because there is no theory accounting for why cheese consumption should matter. It seems to me that, as an explanatory factor, population is more credible than cheese consumption mostly for superficial reasons – it is merely because population is an important correlate of many things that interest social scientists that some people take it seriously, even if they can’t explain why its related to welfare spending.

Finally, what exactly is the threshold beyond which a country’s population is “too large”? While having less than half of America’s population, Japan is still quite large compared to most other countries (with over 127 million people, it’s the world’s 10th largest country). Nevertheless, its Gini score (24.9) is among the world’s lowest. So, is 127 million the cut-off point?

Ethnic Heterogeneity

SDWCs are more egalitarian than the U.S., it was suggested, because they are more ethnically homogenous. This is the only argument I’ve heard that appears to have any empirical support. There is, indeed, evidence for the claim that heterogeneity and welfare spending are inversely related (although this argument is certainly not without its critics). But what does this really say? Does this mean that heterogeneity affects the capability of sustaining the welfare spending? Or, does it simply reflect ethnocentrism, whereby the majority ethnic group is unwilling to include minority groups among welfare recipients, as many claim (perhaps it is due to my ignorance that I consider this an open question)?

Trade Unions

By and large, workers have demonstrably benefited from trade union membership; here, again, empirical research is on my side. Moreover, survey evidence reveals that a majority of Americans have over the years supported trade unions. Yet in spite of unions’ proven benefits and democratic appeal, many conservatives insist that they are a force for evil, and often point to cases in which workers are coerced into joining them. But are we to generalize from what appear to be isolated (and perhaps exaggerated) cases of abuse, and simply ignore the evidence in favor of unions? We must understand that the argument is not whether trade unions are perfect (as I pointed out, so long as we remain fallible, our institutions will always be fallible). The argument is whether a system in which unions flourish is less imperfect than one in which they do not.

The Religious Criterion in Evaluating Welfare States

In response to the parallel I pointed out between the social democratic welfare and Byzantine states, it was remarked that (a) the Byzantine Empire was Christian, whereas SDWCs are not; and (b) that this distinction somehow matters. Here, I point out two basic problems with this argument.

First, far from devaluing social democracy, it implicitly provides justification for a specifically American version of it. The inference drawn from this distinction is that the welfare state is not viewed, in and of itself, as morally problematic. It becomes an evil when the society in which it is embedded no longer practices the Christian faith. But once we reconcile this idea with the belief that Christianity is alive and well in the U.S., a conclusion that ought to trouble conservatives seems to follow: the U.S. is an especially fitting place in which to establish a social democracy, given its continued attachment to the Christian faith.

Second, one’s freedom to pursue happiness is restricted once it is conditioned upon the religious beliefs and practices of his fellow citizens. To be sure, I could not consider myself a true Christian unless I genuinely wished that everyone embraced the Christian faith. However, as far as economic justice is concerned, I could not care less about the religious climate of my society. Is the worker really to be told that he may not be paid a decent wage because his compatriots are no longer Christian?