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Can Someone Please Explain Germany’s Reputation for Fiscal Conservatism to Me?

Assume I believe in risk-adjusted return on capital. That is, I don’t buy a bond yielding 12% instead of one yielding 6% without first considering that the yield difference is affected by the likelihood of Principal return being lower. (But I will buy the 12% bond if I believe the risk premium is too high relative to the 6% bond.)

In short, I fit the second—not the more accurate “traditional” or the current even-more-bollixed “risk management” definition—of the Prudent Investor.

I can watch my neighbor buy more and more expensive gadgetry, while knowing that s/he makes no more than I do, has some old debts, and doesn’t not have dynastic wealth (i.e., the possibility of inheritance or some other deus ex machina) to save himmer. And I notice that hisser buying is growing greater over time.

My neighbor decides to borrow money from people to support hisser ever-more-extravagant lifestyle. S/he offers rates slightly higher than the rate at which I can borrow. (That is, I can borrow money, take the interest payments from himmer, and pocket the difference—if the Principal is paid back on schedule.)

Do I loan the money to—effectively, buy bonds from—my neighbor?

My instinctive answer is “No,” but I am a Prudent Investor. So perhaps I give my neighbor some money—monies I can afford, not something I need to borrow—as a token.

Under no condition do I become—by a margin of more than 2:1—the largest creditor of my neighbor’s lifestyle. Not, at least, if I want to maintain my reputation as a conservative (“prudent”) investor.

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What are Conservatives Conserving?

by Bruce Webb

Over at Open Left they are revisiting the concept of Conservatism and whether it is a coherent philosophy. And after concluding that Conservatives by and large have failed to come up with their own definition proceeded to advance some of their own, that it is about enabling aristocracy, or institutionalizing suffering, or whatever. What is Conservatism: Conservatives Have No Idea. Well I don’t think we get very far simply dismissing conservatism as a pathology, in particular it doesn’t get us very far in explaining small town and rural conservatism and particularly that of people who are not really in a socio-economic position to oppress anybody, the normal explanations based on race and economic class more or less breaking down in places like North Dakota.

Is it possible to come up with a common denominator of Conservatism, one that doesn’t reduce to institutionalized capitalist racism (which conclusion unfortunately is where too many of us liberals tend to gravitate to)? Well I think so, and probably not surprising anyone who has read my stuff, I locate it in a time and a place far detached from 20th century America. More in extended entry.

The first step is to separate Conservatism from its modern variant Reactionism. Political and Religious Reaction was a general response to the larger movement we associate with the European Enlightenment starting roughly in the late 17th century and a specific response to the historical developments associated with various revolutions from the Dutch, to the American, and most dramatically the French and then to the subsequent Continental/Napoleanic Wars. After the final defeat of Napolean the European Powers very consciously set up a system of institutionalized Reaction where the clear enemies were the interlinked movements of Revolution, Nationalism, Liberty, Democracy, and Socialism. To which you could add Free Thinking and such things as Deism. All of these were threats to a political and social system based on hereditary monarchy and aristocracy. Nor were these threats idle, within a hundred and ten or so years of the Congress of Vienna in 1815 imperial and royal houses whose histories could be traced back up to a thousand years were for the most part in Marx’s Dustbins of History.

While clearly the kind of Authoritarian Reaction that dominated the 19th century, or at least went down fighting, consciously drew to itself the elements of Conservatism and as noted can be seen as a varient should not be identified with it. Because most Conservatives are not Kings and Princes, or even Popes and Priests, and while there are reasons why Conservatism is most comfortable within a econo-political system based on authority and hierarchy they are not I think its motivating force.

The key question for me in tracking down Conservatism is whether it existed in recognizable form prior to the Enlightenment? If so it can hardly be a product of the latter even though it might have been (and in my opinion was) reshaped by it. And I think the answer is clearly yes, as far back as we have evidence of Western Civilization to which might well add Asian Civilization we see some particular shared characteristics that I think are the basis of Conservatism (I don’t know enough about Oceana, Africa, or Pre-Columbian America to even venture a guestimate on this in relation to them. Feel free to fill in in comments.)

So to answer the title of the post, what are Conservatives conserving? I suggest it is the Household, here seen as a socio-economic unit headed by the Householder (in English the ‘hus-bund) ‘with certain authority delegated to the Wife (O.E. ‘hus-wif’). In this context we can’t separate out ‘house’ ‘household’ ‘family’, each has a literal and figurative center or centers and a defined boundary, and defending that boundary figuratively, legally and often physically was the responsibility of the ‘family’ under command of the householder. And of course the concept of ‘hold’ is integral to both ‘householder’ and ‘holding’ as well to the legal terms of ‘possession’ (cognate with ‘seize’ itself ultimately identical to English Law-French ‘seisen’).

If we had to find a general European translation of ‘household’ we can hardly do better than Latin ‘familia’ which means more than the biological unit, but extends to all human and even animal occupants of the household, all of which are ultimately under control of the head of the household. Now viewed from the outside through our Enlightenment eyeshades all of this looks like a dictatorship, from the inside out that makes no more sense than asking why ships are generally not directed by committee, when the storm hits someone has to be in command.

If we take the European household back to its origins we can see that the authority of the householder extended most definitely to religion, indeed in very ancient times it seems that each householder was his own family priest, each family having its own religion tying it together (‘religio’ possibly deriving from ‘religare’ ‘to bind fast’ cf ‘ligature’). And in such matters precision and continuity were all important, it is characteristic of European religion from its beginnings to the Reformation that change in ritual is not only not welcome, it is potentially disastrous to the household.

Seen from this perspective much that seems primitive in Conservatism is simply natural in context. Patriarchy, emphasis on property rights, rigidity in religious belief, unwillingness to sacrifice the family’s economic interest to outside demands, all can be seen as simple defense of the physical and human boundaries of the family/household.

If we extend our view outside the individual household other aspects of Conservatism come into focus. First no household is a total island, each of necessity is associated with others in a system of mutual defense and with that comes the need for internal conflict resolution (law), military command (kings), and community ritual (priests) all of which are necessary to protect the joint boundary in the same way as the individual householder protects his own boundary. On the other hand this commitment to law, common defense and religion might not necessarily extend to the general welfare. While this will seem heartless from the perspective of universal humanism or the specific tenets of Christianity and other faiths, there is nothing intellectually incoherent about privileging the family and then the larger tribal interest to extra-familial individual interests inside and outside the tribe.

So can Conservatism exist outside Capitalism? Of course, defined as protecting the Household it did so for centuries and millennia. Is Conservatism inherently dependent on racism? Well no, not everything needs to be viewed through the lens of American Exceptionalism and the Peculiar Institution, identifiable Conservatism existed in both European and American contexts where issues of race hardly came into play at all. Or class for that matter. On the other hand Conservatives are by nature suspicious of outsiders, who are by nature a potential threat to the family. Which may leave them very open to classifying the Other negatively by race or religion, after all from this perspective Conservatism is all about drawing and protecting boundaries.

This is by no means meant as a defense of the organized Conservative project as that is seen working its way in the media and Congress, just an appeal to separate out what can properly be seen as a Reactionary attempt to exploit Conservatism to advance an anti-Enlightenment agenda from a Conservatism that was never fundamentally exposed to the Enlightenment at all but instead stuck to a belief system hundreds and perhaps thousands of years old. Some guy wanting to provide for his family and protect what is his may express those beliefs in ways foreign to Liberalism but is not by that token simply open to condescension and disrespect in the ways seen in the linked post from O.L.

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Is this the return to older values?

Savvy consumer of the St. Louis Today on line edition points us in the direction Pete Peterson might be suggesting from this post:

Debtors prisons might have gone the way of medical leeching and boneshaker bikes, but that doesn’t mean consumers in some states can’t end up in the clink if they fall behind on their bills.

Today, the Minneapolis Star Tribune reports on what appears to be the rising number of arrests of debtors who have been thrown behind bars for missing court-ordered debt payments or for not appearing in court after being sued by debt collectors.

The startling story reveals how debt-related arrest warrants in Minnesota have jumped 60 percent in the last four years, with 845 cases last year. That’s not a large segment of the state’s total arrests, but that doesn’t offer much comfort to those consumers who have been hauled into jail for court offenses stemming from debts as small as $250.

Some responsible, on-time bill payers might not be overly sympathetic to the jailed debtors’ plights, but they should keep this in mind: Often, the expense of arresting and jailing the consumers exceeds the amount owed. And that price tag, of course, is picked up by the taxpayers.

The laws allowing for the arrest of someone for an unpaid debt are not new.

What is new is the rise of well-funded, aggressive and centralized collection firms, in many cases run by attorneys, that buy up unpaid debt and use the courts to collect.

Update: Rdan here…Yves Smith takes the high road on ‘ruthless’ in PR push against strategic defaulters underway…is there a debtor’s prison in your future?. This is Peterson’s choice of words.

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The Four Pillars of Conservatism: it is not as Incoherent as it seems

by Bruce Webb

Family values/patriarchy; Property rights/inheritance; Public order/tradition; External defense/xenophobia.

Taken individually and in combination I think they serve to explain the essential unity of the various divides of modern conservatism into paleo-Cons, neo-cons, social values Cons, religious Cons, and perhaps most for my purposes the alignment of top level economic strata: bankers and factory owners with what are in economic terms their natural enemies: shopowners, small farmers, and even those factory workers. If we were all at heart Homo Oeconomicus, each seeking to maximize our our own self-interest, why would those groups accept an economic system openly rigged against them. (It is not like at any point in history or high or popular literature that bankers have been popular figures, instead they are Snidely Whiplash tying Sweet Nell to the tracks so as o get her property. http://carmenmillet.files.wordpress.com/2009/07/dorightcast.jpg

More below the fold.

First I don’t think that these four principles though perhaps are not exhaustive can be denied to be common among all conservative movements, although the stress falls at different levels. The question is whether there is a historical model that supplies an underlying unity here? I suggest there is, with the caution that it may only apply to the European and American models, though personally I see it as fairly explanatory in Asia as well.

This model was set out out by Fustel de Coulanges in his 1864 The Ancient City (1 MB). As a sourcebook for history it is not much consulted anymore, we know stupendously more about the religion of the classical and pre-classical era than we did in 1864, a date when when modern arcaheology and classical philology were still in their veritable infancies, and the discipline to which it actually best fell, that of Sociology, was not yet in formal existence as such. But examined with fresh eyes it offers a powerful key.

For Fustel the central unit of the society was the Household, the familia, the family, which was centered physically and spiritually around the hearth, the family fire. The hearth was not only the source of light and heat, it was the abode of the family spirits, in Latin the Lars and Penates, and it and them had to be propitiated by private family rites, to which the head of household was the Priest. Fustel meant this literally, that every family religion was in principal different, though of course the Family in the larger senses, the Kin, would naturally share most elements by inheritance from common ancestors.

Now it is a common feature of most world historical religions that they require precision in prayer and ritual, any error in recitation or performance potentially causing failure or worse, This is one reason why our oldest surviving languages are sacral in nature: Latin, Biblical Hebrew, Old Church Slavonic, Sanskript all survived in unchanged form among the priests and rabbis even as they spun off multiple modern descendants. For the Household change in these prayers and formulae were not just bad they were potentially disasterous, ‘new and shiny’ was fine for the children, ‘tried and true’ was the rule for the Householder.

But as crucially important as was the hearth, the center, equally important, and subject to its own set of religious and cultural practices were the household boundaries, first the threshold to the house, then the yard, typically marked by a wall or hedge. Each dileneated an area of special authority for the Householder, in Old English his ‘mund’ or ‘guardianship’, in origin related to I.E. ‘man-‘ hand.

These concepts are not obsolete today, we have a variety of sayings and concepts that incorporate them ‘hearth and home’ (in America mostly used to sell fireplaces, but a feature of British literature and poetry), ‘a man’s home is his castle’ and the age long rule that raising your fist to anyone in your host’s home is a direct insult to that host, he had extended the protection of the household over his guests, you can take your fighting off premises.

Anyway I could extend examples endlessly and will in comments, but I think this provides a pretty powerful explicatory model. Conservatives start with the principle of protecting the household. First and foremost that requires maintaining the traditions, particularly the religious ones, they are what provide continuity of the Family as a whole. Second that requires maintaining the authority of the Householder over the Family both as people and as fixed areas of building and land. Third while the obligation of obedience flows up, the Householder equally shares the obligation of maintance to all under his protection, and do what he can to secure that after he dies to at least enough family members to preserve the Family. Fourth the Householder is under obligation to defend the gate to his yard. But while a man may be king of his own castle, it is rarely an island, there are a lot more people outside the gate than inside.

The solution here is as age-old as the Family itself, it is the collective protection offered by the Tribe. And in Fustel’s model we have a simple replication. The Tribe will itself have its central hearth (just as each medieval village will have its smithy and bake oven), it will have it own set of religious practices, it will have its own yard whose terminus or limes will typically be marked by a wall which all householders are pledged to defend in time of need. And tribal leadership however constituted will extend its own mund over all that are withing those limes, just as the householder does over his guests, and woe to those who would violated either threshold, a ‘gate-crasher’ is not committing a innocent jest, instead that is a serious and even deadly crime.

Unflinching commitment to these four pillars; Primacy of Family/Property Rights/Tradition/External Defense can give rise to some outcomes that seem repugnant to those of a Social Democratic lean. In particular there are no natural obligations to any outside your Family or Household as defined by its Yard, simple humanity or the existence of a current surplus may lead you to feed the starving or cloth the freezing but not at expense of the Family, where that interest is decided and controlled by the Householder. On the other hand paying dues to the lord or taxes to the king is just the cost of paying them to organize the exterior defense of the town/tribe and/or not loot you directly, either way it serves to protect the integrity, physical and otherwise of the House and Family. Under this over-arching world-view the Other and the stranger are always a threat, at least potentially, to your House, and the borders of your Tribe or Village are literally sacrosanct, and marked by such at annual rituals.

Why would fairly low income conservatives oppose inheritance taxes even when they know they would never be exposed to them? Because they are a violation of pillar two Property Rights/Inheritance, each Householder has his own obligation which should not be impinged on externally. Why do conservatives loudly defend individual liberty in principle but endorse strict patriarchal control by the Householder? Because such liberty belongs to the Family and to family members outside the gates, once in the gate, and even more through the threshold and in the presence of the hearth, the Head of House takes control.

Social Democracy takes its organizing principle along the lines of “We are all on this Earth together” to which the Conservative replies “The Hell we are, Family first”. And before Liberals and Social Democrats rise ourselves up in indignation, we might remember that rich kids in Sweden almost certainly have better ski trips and summer vacations in Spain than do poor kids, even in the best of Social Democratic societies the tradeoffs between Family and Society only go so far.

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