Belloc Was Right

• The U.S. consumer seems to have hit a "soft patch," says yesterday’s press reports. Confidence is down. The price of gasoline is up — to an average of $2.32 a gallon. The price of housing is up too. Twenty years ago, an average household would pay about five years’ worth of earnings for an average house. Now they pay eight years’ worth.

• "What no one expected," said a colleague the other day, "was the way capitalism and communism get along in the modern world."

People thought the two ideas were mutually exclusive. As recently as the Reagan administration, people with brains thought there would have to be a showdown… that the two ideologies could not live together; the world wasn’t big enough for them both. But look what has happened. Today’s the most dynamic economy on the planet — one with what appears to be the most freewheeling capitalism — is in a communist country, China.

And in America, which is supposed to be a "capitalist" nation, practically everything is regulated, collectivized and subsidized — especially in the economic sphere. Even when people eat too much and become fat, they blame McDonald’s… or the government… or society for their own obesity. Everything requires permission from some group… and when things go wrong, it’s always the fault of some group. Individual responsibility is disappearing.

Hilaire Belloc looked ahead and described the modern world back in 1912:

"The future of industrial society… is a future in which subsistence and security shall be guaranteed for the Proletariat, but shall be guaranteed… by the establishment of that Proletariat in a status really, though not nominally, servile."

People lose their independence. But so what? According to Belloc, they are "inclined to the acceptance of [their servile status] by the positive benefits it confers."

What do we make of this? The isms and ideologies are largely simpleminded humbug… human organization is infinitely complex, subtle, ironic and often paradoxical.

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.