Roger Morbeck says:
October 21 2015 at 7:21 am
Of course, there’s no “need” for poverty, and poverty can be eliminated in the modern world. However, in pre-industrial, subsistence societies, poverty is the natural condition of humanity. Which means, of course, that ZW is wrong: most poverty has not been caused by wealth extraction.

Richard Murphy says:
October 21 2015 at 7:51 am
Your argument has no logical element to it

If poverty does exist now because of wealth extraction why wasn’t that always, at least to some degree, the case?

History might suggest that was definitely true to me

Jeebus.

54 thoughts on “Sigh”

  1. The Murphatollah and logic are clearly strangers to each other.

    Why not assume wealth extraction always the cause of poverty? Because there is a simpler explanation.

  2. Wealth extraction is eg. building the pyramids. So to that extent he is right that it has happened before in history

    Unfortunately the corollary is The Pharoahs = The Courageous State.

  3. TDK

    that reminds me of a good idea for an economics paper that a friend of mine had – don’t think he’s ever going to write it, but it’s an extension of the Malthusian model, wherein any economic surplus is erased by population increases, to include idea that economics surpluses were also erased (to some extent) by doing damn fool things like building cathedrals. Would be interesting to know how important that was – diverting output into essentially unproductive follies.

  4. might he have a point? I do not know extent to which in agrarian subsistence societies the peasants are taxed (sorry! have wealth extracted) by the local big man, who does nothing much useful with it, thereby being denied output that could have been invested in their own farms / health / human capital whatever?

  5. LE

    Which is where I was coming from. Also the local big guy would not let anyone else extract the wealth from his desmesne. So that land is bled dry to pay for gluttony and expansionism, and a template is set, or rather, is perpetuated.

  6. Oh for fuck’s sake.

    The definition of a subsistence economy is that it only produces enough to subsist on. There isn’t any surplus to extract.

    Sure there have been economies where evil nasty neoliberal capitalists have heartlessly extracted wealth from the masses.

    But there have also been societies where everyone was piss-poor and only just surviving because, just because. There was no KING Australian aboriginal living in a castle built on top of Ayers Rock. They were all piss poor just because.

    It’s another example of Murphy’s pig ignorant insistence that he knows everything and that every economic and social woe is down to some sinister plan by neoliberals.

    The man is a twat.

  7. Would be interesting to know how important that was – diverting output into essentially unproductive follies.

    I’m not sure cathedrals were follies: I’ve been around several of the giant ones in France, and was awestruck at the level of detail and craftsmanship, and wondered how many manhours went into this and who paid for it. But I did notice that the cathedrals were built in towns of importance, and I wondered which came first: the cathedral or the importance. I suspect that once a fairly important town got a cathedral, the town’s importance increased (along with visitor numbers: pilgrims, merchants, etc.) and got wealthier.

    Cathedrals might not have made money (it would be an interesting study) but I’m not sure what else medieval wealthy folk could have built instead. Schoolz ‘n’ ‘ospitals?

  8. It’s noticeable that all the examples Arnald etc mention seem to refer to the wealth robbed off peasants by mediaeval barons, and that is true; any surplus wealth was extracted to pay for wars and glorious stuff like that. An dof course the king in his great kindness did found the occasional hospital and school, and so the monks, who helped themselves to a further bit.
    As this situation only improved when it was no longer kings and barons (the state), the evil capitalists building factories and having people choose o buy their stuff.

    Fucking idiots, the evibnce is there in front of them.

  9. But even if he’s right about wealth extraction, if the wealth extractors are also increasing the value of the workers’ labour, the net result can still be a decrease in poverty.

    After all, there isn’t much value added in just banging rocks together (especially if you’re in a prog rock band). But with the evil capitalist providing raw materials, machinery, a factory to put it in, a product design and marketing to sell it, suddenly banging rocks together is skilled manufacturing.

  10. Luis
    Mancur Olson’s point about stationary bandits is that they are better than roving bandits. They have an incentive to farm the locals and provide stability, which may lead to development.

    http://www.jstor.org/stable/2938736?seq=1#page_scan_tab_contents

    If the choice is between a state of nature and one with stationary bandits, the stationary bandits win. The peasants are better off even with the bandit chief. There is no surplus without the stationary bandit because the roving bandits steal everything.

  11. The constant references to ‘Neo feudalism’ suggest a man who, if he ever had any contact with the real world, has long since departed into ‘tin foil hat’ territory – A truly vicious thug whom the equally ignorant and in many cases genuinely malicious have fixated on as some kind of intellectual titan when in reality he is a particularly thin-skinned and buffoonish crank

  12. Andrew C

    if you are little less anal with your language, then hardly odd idea to think that in the past, and prob in some places today, that some very poor, close to subsistence economies have taxes / tributes to big man that might be contributing to keeping the poor poor

    Tim N, but how does making a town important increase the quantity of goods and services the economy is producing / consuming as opposed to just affecting its location. I mean I can see some arguments, sceptical returns are enough to call it much more than a folly (I will concede returns somewhat more than negative 100% if you like) – alternatives might include investments in land, storage, roads, workshops, etc.

  13. Don’t forget the utility of eternal salvation that those built and paid for the cathedrals believed they were buying themselves.

  14. “Luis Enrique

    Andrew C

    if you are little less anal with your language”

    I use the words ‘fuck’ and ‘twat’.

    If that conjures up ‘anal’ for you, I guess each to their own.

  15. So, what about the modern “Big Man” grabbing 40-50% of people’s income and pissing it away on follies? Wealth extraction?

  16. Bloke in North Dorset

    When we had an empire the left told us that it was wrong for us to tell other countries how to live their lives and that they were quite capable of looking after themselves.

    Now the left are saying they can’t be trusted to negotiate with MNCs and only the left can look after them and save them from themselves.

    And when they do this calculation about wealth extraction, do they add back in the fact that those resources won’t being used and how those countries that have benefited from the resources have created surplus wealth and done things like develop malaria drugs or are currently trying to cure Ebola?

  17. @AndrewC

    I think Luis is using the word anal to describe the very literal use of the word “subsistence”. In environments where farmers could be producing a (small) surplus, Luis is making the point that the big man is stealing the small surplus and contributing to the farmers being kept poor – as opposed to their ability to accumulate the surplus and improve their lot in life.

    My point (or rather the Olson point) is that the big man could well be providing the environment for the creation of the small surplus.

  18. @TimN
    Medieval cathedrals had either a goodly range of saints’ relics or were the places where saints either did something of note or kicked off. And attracted pilgrims to view same & take part in the associated god-bothering. Who coughed up with attendance charges for the above & spending in the town for bowls of meager gruel etc
    So think the O2, Boyzone & the hamburger stall outside, for the modern economic equivalent.

  19. @Louis Enrique
    “…..that some very poor, close to subsistence economies have taxes / tributes to big man that might be contributing to keeping the poor poor…”

    Yes, that is exactly what I said. MIGHT be contributing. MIGHT. But in Murphy’s world it’s ‘ALWAYS’

    You see the difference?

    MIGHT be a contributory factor.

    ALWAYS…. the case…. DEFINITELY true.

    It’s that grating smug arrogant certainty in an area of knowledge where he knows nothing. Like some annoying fat bloke in the pub who has clearly never so much as kicked a football in their life telling you with pompous certainty that Stoke City are the most successful Premier League team in history.

  20. Andrew C

    yes

    Ken,

    of course you’re right, I was kind of assuming big man not doing enough to justify the extraction but that assumption quite easily unwarranted.

  21. @AndrewC – ALWAYS, DEFINITELY, unless employed by a leftie govt/courageous state/union. Of course. Then wealth is never extracted, only returned to the State that enables it to exist.

  22. Ahh, now I understand their logic.

    They define poverty as having less than 60% of median incomes, rather than actually being poor. So they can refer to the poor, meaning having an income less than 60% of median income, because obviously people in poverty = poor people, right? No…

    So following that logic, you can have poor people, but not necessarily people in poverty, unless one of them has found a dry crust in the jungle. She (!) is then the wealth extractor and has now created poverty among the rest.

    Of course, the folly of this tainted logic is that the inventors of said logic don’t need to give a shit about the really poor people. They have also defined themselves as the most extreme wealth extractors on the planet.

    And is there a more disgusting kind of wealth extractor than a rich person who takes money from a charity?

  23. Luis

    I suspect that cathedrals were generally funded out of the discretionary element of any economic surplus – superprofits if you like. For example, the big cathedrals were often built in cities of great wealth – Venice, Milan, London etc. Outside these bustling cities, cathedrals are often unassuming structures.

    Another observation, not all cathedrals were finished or there was a considerable lapse of time between work breaking off and subsequent completion – eg Cologne. Narbonne cathedral is just the choir end. At Malaga, one tower is about 3/4 as high as the other. It is never entirely clear why but it seems that financial constraints and changes in economic status meant that work was halted.

    Another example, Ivory Coast is by any standards not a wealthy country – per capita income is about $2000 and GDP about $40bn. However, between 1985 and 1989 they constructed what is said to be the largest church in the world at a cost of $300m. So about 0.2% of GDP for every year of construction.

  24. Tim N

    I suspect that in most cases the cathedral came after a city became prosperous and its prosperity governed the scale of the cathedral that was built. I cannot offer an explanation of why Ivory Coast requires such a huge cathedral however other than an attempt to gain prestige.

    Amiens cathedral was financed mainly by the sale of woad. Chartres is the most important town in the food-producing area of Beauce. Milan was an important trade centre, controlling trade over and round the Alps into the Po valley. It is relatively unusual to find a massive cathedral in a place that was not wealthy when the building was constructed.

  25. It’s worth pointing out that the Pyramids served a vital purpose in the Egyptian economy. Very Keynesian, in fact. The government would tax away most of the grain at harvest time, and then hand it back out over the rest of the year (when less farming was done) in exchange for labour on the Pyramids, monuments, etc.

  26. Bloke in Costa Rica

    “I cannot offer an explanation of why Ivory Coast requires such a huge cathedral however other than an attempt to gain prestige.”

    Because the bloke in charge was an utter maniac. If ever there was an instance of “wealth extraction” to no good purpose this was it. Funnily enough I doubt in Murphy’s world this counts.

  27. Arnald, no. People allow the state to exist, to the extent that it benefits them (including indirect benefits like not wanting to see other people starving in the streets.).

    The reverse is the worst kind of Fascism.

    On your earlier point, sure, the local warlord or whatever may be extracting any surplus. but that doesn’t prove poverty is always man-made. Any surplus is either a windfall, or the result of earlier investment (same). A windfall will only generate consumption, not wealth, unless it’s invested. Investment is not natural, as it depends on constructs like property rights once you get beyond the level of squirrels burying nuts. (And property rights by definition create have-nots, like your hunter-gatherers, ie inequality.)

    So no, wealth is not natural, and RM is fundamentally wrong. Poverty is natural, but can also be induced by man.

  28. Maybe they built cathedrals because they had a different value system to us, as has been mentioned the workers were glorifying God in building the place, something they would have placed a higher value on than most in modern society. The torturers in the Spanish Inquisition knew torture was evil, but believed that the saving of a soul would outweigh the evil when they were judged by God, they saw themselves as being brave in taking that risk.

    Then again there is the dick waving competition element that is still around today which would also have been a factor.

    For old fashioned taxation just think about baa baa black sheep, a very succinct view.

  29. BniC

    Different value system…most definitely. I had just typed my last post when I started wondering about Canterbury, site of a massive cathedral and yet not naturally a wealthy place. It waas of course the focal point of the Christian Church in England, so that gave it prestige. But the real motor was that very Mediaeval thing, a tomb cult. People came from miles around, or even foreign lands, to visit the tomb of Thomas Beckett – cf Chaucer. Canterbury’s mainstay today is tourism and I suspect that it was tourism back in the 14th c. as well. Sufficient to maintain a 400 year building programme for the cathedral.

    Tomb cults like that seem a little weird today. But we have penal tourism – people visit concentration camps and former KGB barracks and places like Alcatraz.

  30. Tim N, but how does making a town important increase the quantity of goods and services the economy is producing / consuming as opposed to just affecting its location.

    Because some services otherwise would not exist: somebody will be making candles to be placed inside that cathedral, for example. If the cathedral didn’t exist, the pious would not necessarily be finding another cathedral to put candles in.

  31. The torturers in the Spanish Inquisition knew torture was evil, but believed that the saving of a soul would outweigh the evil when they were judged by God, they saw themselves as being brave in taking that risk.

    I read an article recently on ISIS written by somebody who appeared to be among the few who have figured out what they’re all about. His argument was that they think torching an apostate Jordanian pilot is doing him a favour.

  32. As someone who lived there for a year (long after the Basilica was built, but memories are long), I concur exactly with BiCR’s analysis of the Côte d’Ivoire basilica. Houphouët-Boigny was practically the archetypal African strongman president, complete with grandiose ambitions and a complete failure to understand that capital cities are built by the people and not by the president. (The major port, Abidjan, is the commercial capital and the active hub of the country.) He only had Our Lady of Peace built to the size it is so that it could beat St Peter’s in the Vatican to become the biggest church in the world.

    Wealth extraction is precisely the word for it: the Basilica alone (according to Wikipedia) doubled the RCI national debt.

  33. Tim

    I think you need to do much better than job creation for candle makers (making candles to be pointlessly offered to the Lord) to come close to establishing Cathedrals are anything other than a hugely expensive disaster from an economic point of view.

    I mean what’s that, a sizeable chunk of GDP invested to simulate the religious accoutrements industry? I thought you’d were most often to be found arguing against insane state (or state-like) run white elephants. Next you will be telling me this is a good idea:

    http://cherokeegothic.com/2015/10/15/icon-based-development/

  34. “It’s worth pointing out that the Pyramids served a vital purpose in the Egyptian economy … tax away most of the grain at harvest time, and then hand it back out over the rest of the year (when less farming was done) in exchange for labour on the Pyramids, monuments, etc.”

    thereby making the farmers substantially worse off than letting them store or sell the grain themselves and occupy their time over the rest of the year doing something useful

  35. Luis: Your discussion gives me the basis for an interesting hypothesis. Marx and Engels famously talked about the Protestant work ethic, but has anyone attempted to measure or to model how much better Protestant countries did because they stopped sinking wealth into church ornaments and the like, and instead put it to economically productive use?

  36. I think you need to do much better than job creation for candle makers (making candles to be pointlessly offered to the Lord)

    Oh FFS! I used that as a single example after you said:

    “how does making a town important increase the quantity of goods and services the economy is producing / consuming as opposed to just affecting its location.”

    Nowhere did I say that candle-making justified the construction of cathedrals.

    I thought you’d were most often to be found arguing against insane state (or state-like) run white elephants.

    I am. But these cathedrals were built a little before my time, so alas I wasn’t around to protest them. Nevertheless, they may still have been economically worthwhile – I really don’t know. Your silly anti-religious swipes and insistence that they were economic disasters have done nothing to sway my opinion one way or the other. But even a fool might ask why, if cathedrals were such economic disasters, why cities like Rheims continued to flourish after their construction.

  37. cool it Tim, was a bit tongue in cheek.

    Still, I think you have to go a long way to cook up economic returns on a scale large enough to justify the enormous costs of building the buggers. If anything is going to sway your opinion, it should be that. Do you have any ideas what the economic returns to cathedrals are – how they increase productivity?

    (If you want to accept the glorification of God as admissible, well that’s beyond debate).

    I do not mean to suggest that cathedrals are economic disasters on a scale to ruin cities. Neither are HS2, Hinkley or the Swansea tidal barrage. Economic disaster = costly and unproductive use of resources that could be better employed elsewhere.

  38. If you want to accept the glorification of God as admissible, well that’s beyond debate

    You appear to be arguing that a kebab shop in Mecca is not well situated. One doesn’t need to believe in God to recognise worship can bring in money.

  39. er, no I was just allowing for the possibility that you might regard glorifying God as a worthwhile activity.

    and bringing in money to a location is zero sum. I see your point that it might justify the investment for the town that attracts the punters, but it’s not productive.

  40. “Wells? Durham? Canterbury? Amiens? Tours? Rouen?”

    Tim N…next time you visit Brecon, Oxford, Hong Kong, St Helier, Agde, Annecy, Ajaccio, Montpellier, Castellon de la Plana… tell me how impressive the cathedrals were.

    Your counter-examples are interesting but they tie in exactly with my observations.

    I see that Luis has not picked up on the tomb cult aspect of some of these places. For Canterbury the tomb cult resulted in a tourist industry. To cite
    wiki

    “The shrine in the Trinity Chapel was placed directly above Becket’s original tomb in the crypt. A marble plinth, raised on columns, supported what an early visitor, Walter of Coventry, described as “a coffin wonderfully wrought of gold and silver, and marvellously adorned with precious gems”.[22] Other accounts make clear that the gold was laid over a wooden chest, which in turn contained an iron-bound box holding Becket’s remains.[23] Further votive treasures were added to the adornments of the chest over the years, while others were placed on pedestals or beams nearby, or attached to hanging drapery.[24] For much of the time the chest (or “ferotory”) was kept concealed by a wooden cover, which would be theatrically raised by ropes once a crowd of pilgrims had gathered.[21][23] Erasmus, who visited in 1512–4, recorded that, once the cover was raised, “the Prior … pointed out each jewel, telling its name in French, its value, and the name of its donor; for the principal of them were offerings sent by sovereign princes.”[25]

    The income from pilgrims (such as those portrayed in Geoffrey Chaucer’s Canterbury Tales) who visited Becket’s shrine, which was regarded as a place of healing, largely paid for the subsequent rebuilding of the cathedral and its associated buildings. This revenue included the profits from the sale of pilgrim badges depicting Becket, his martyrdom, or his shrine.”

    Of your other examples Durham had 2 tomb cults – St Cuthbert and St Bede. Wiki again:

    “Durham soon became a site of pilgrimage, encouraged by the growing cult of Saint Cuthbert. King Canute was one early pilgrim, granting many privileges and much land to the Durham community.[10] The defendable position, flow of money from pilgrims and power embodied in the church at Durham ensured that a town formed around the cathedral, establishing the early core of the modern city.”

    I covered Amiens in an earlier post. perhaps you are assuming that an insignificant city today was insignificant in the 14thc. The dye industry is significant today – think BASF. Woad, being one of the few dyes available in the mediaeval period was economically significant. Amiens cathedral was built on superprofits. And also, since cathedrals were places of pilgrimage, there would have been some tourism income too. Across the parvis from Amiens cathedral is the hostelry that was built for pilgrims.

    Wells is an interesting case. This is the one example so far that seems to support, to a limited extent, Luis’s hypothesis. It is way too big for the town and probably did get close to scraping into normal profits. Wells was a cloth-producing centre but probably did not generate the surplus required for such a building:

    “Bishop Ralph of Shrewsbury followed, continuing the eastward extension of the choir and retrochoir beyond. He oversaw the building of Vicars’ Close and the Vicars’ Hall, to give the men who were employed to sing in the choir a secure place to live and dine, away from the town and its temptations.[42] He had an uneasy relationship with the citizens of Wells, partly because of his imposition of taxes,[42] and he surrounded his palace with crenellated walls, a moat and a drawbridge.[43][44]”

    Tours is a crossing point over the River Loire. Economically significant, at least in far-off times. It was a major city in the Roman era – it even had one of the largest amphitheatres.

    Rouen was one of the largest cities in Europe in mediaeval times – its position on the banks of the Seine is perhaps a clue. During the 100 nyears war, it became the English capital city in occupied France. Today a bywater, but then it was a powerhouse.

    Far from being a burden, many mediaeval cathedrals were profit-generators. And even the Ivory Coast example suggests that the burden, if it exists, is relatively insignificant. The Gothic phase was surely the first flowering of the international contractor – all the stone masons, carpenters, architects, stone cutters, travelling from city to city. If I recall correctly, there is even a church in Salamanca, dedicated to Thmas Becket, built by the people who worked at Catnterbury. The Caen stone quarries and the marble quarries in Italy must have seen a massive stimulus over these few centuries.

    I await Luis’s rebuttal!

  41. er, no I was just allowing for the possibility that you might regard glorifying God as a worthwhile activity.

    Some people think glorifying a football team is equally a waste of time but Manchester United seem to do quite well financially.

  42. Annecy…tell me how impressive the cathedrals were.

    That’s a 1920-30s basilique, and I can see it 200m away from my living room (when I’m there). 🙂

  43. Tim…I have checked on google maps and wiki but this “cathedral” is an average neo-classical church and is just another parish church. Are you thinking of another versio
    n of Annecy

  44. Tim…I have checked on google maps and wiki but this “cathedral” is an average neo-classical church and is just another parish church.

    Yes, that’s why I was a bit surprised you referred to a cathedral in Annecy…

  45. it’s called a cathedral both on google maps and in wikipedia. And your view of its age made me wonder whether you were referring to a different building:

    “It was built at the beginning of the 16th century by Jacques Rossel as a chapel for a Franciscan priory. During the French Revolution the building was used as a temple of the Goddess Reason. It was raised to the status of a cathedral in 1822 when the Diocese of Annecy was created from the Diocese of Chambéry.”

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