Michael L. Satlow

Then and Now

Wealth and Poverty

The New Switzerland?

by

Congress is, or at least should be, busy.  Over the next few months it is supposed to tackle reforms to our health care system and tax code and produce a new budget.  Even if not enacted in their present forms (or outlines) – as I hope not – they are bound reshape our economic lives toward a more conservative vision.  That prospect got me wondering, What would an America driven by conservative economic policy actually look like?

While liberals are quick to look to Scandinavian countries as exemplars of societies driven by liberal economic (and social) policies, it might be natural for conservatives to look to Switzerland.  In many respects, Switzerland is a conservative’s dream country.  It has a weak federal government with much state power given to the cantons (equivalent to our states) and municipalities within them; low taxes; high tariffs on foreign goods; and a consumer driven health-care system.

And the results of these policies are remarkable.  Unemployment is typically low (about 3.3% now and forecast to drop).  Its GDP per capita is $63,616, one of the highest in the world and beating the U.S. ($57,325).  With an average family tax rate of 9.1% (compared to the U.S.’s 20.8%), high wages (despite no official minimum wage – another plus for conservatives – the actual minimum wage tends to hover around $25/hour), and moderate costs for health care, the average household disposable income is $35,952, with the top 20% earning four times the bottom 20%, while in the U.S. it is $41,071, but the top 20% earn eight times the bottom 20%.  Government debt is about 45% of GDP, less than half what it is in the U.S.  Despite its lean government, Switzerland spends about 50% more per student than the U.S. and has excellent educational outcomes.  Public university education – there really isn’t a private one to speak of – is by our standards virtually free. (Most of these figures come from OECD data, found here).  And it’s a clean country with a diverse population, a great infrastructure, and happy residents.

This would seem to be a strong endorsement of the Republican agenda – after all, if it moved us more toward Switzerland, how bad could that be?  As always, though, there are catches and caveats.

Things cost a lot – a lot – in Switzerland.  There is more income, sure, but also $6/gallon gasoline, $5.50/gallon of milk, and a $14 combo meal at MacDonalds.  Switzerland is a society of renters, not owners (only about 45% own their homes).  These concerns over costs are certainly a factor in the country’s low fertility rate of 1.5 children/woman.  Nor is there much economic growth (typically 1%-2% annually, tops, per year) and economic mobility is low; although university is free, most students are earlier tracked into (excellent) vocational programs.  The health-care system requires that everybody has insurance and is tightly regulated, using company profits to subsidize weaker parts of the system.  The government spends relatively little on “welfare” programs because such issues are dealt with on a local level, and often families are expected (compelled) to support their own less fortunate.  Arguably the biggest difference, though, is bearing the expense of our military.  Whereas Switzerland spends about $300 per person on its military, we currently spend about $1860.  For a family of four, that’s, on average, an additional $6000 each year.

Personally, with the salaries of academics significantly higher than they are in the U.S. (I was told that post-doc could make $80,000/year) I suspect that I and my family would do very well in Switzerland, or a country that was more like it.  Its policies are excellent for a population that largely wants to maintain the status quo.  But the status quo in the U.S. – with twice the rate of inequality and more than twice the poverty rate – is not what we need as a country now.  Perhaps one day, but not today.

And Moses Said Unto the GOP…

by

The other day Nicholas Kristoff published a satirical take-down of Paul Ryan and his budget priorities in the New York Times.  He imagines a conversation between Ryan and Jesus, in which Ryan pushes back on Jesus’ call to have mercy on those who are poor .  Such mercy, Ryan essentially argues, amounts to a policy of moral hazard, because it encourages the downtrodden to continue the same behaviors that led them into trouble.  Jesus, of course, demurs.

Kristoff got this imagined conversation partially right.  While recovering the opinions of the historical Jesus are beyond what we can know with much certainty, the Gospels tend to portray Jesus in a much more radical light than Kristoff suggests.  In economic terms, Jesus is portrayed less as a social democrat than as an anarchist: in this new age of God’s kingdom, money matters so little that the best path would be to give it all away.  As the new age dawns, the rich will be left behind – not because of anything they do or did, but simply because they are rich.

This anarchist streak in the New Testament (which is not the only voice we find there) has continued to echo through Christianity, especially in the practices of asceticism, monasticism, and vows of poverty.  Regardless of whether one agrees with it or not, though, it represents a genuine struggle with a perennial and enduring human problem.  We, as human beings, like to consider ourselves as better than animals if not quite divine.  And that leads us into all kinds of difficult questions about how we relate to the material world.  How do we behave in a way that fully realizes our distinctive humanity?  When we copulate and eat, should we do so like animals – which we surely have the ability to do – or should we seek to behave in a way that “transcends” our animal nature?  So too, do we seek to acquire as much as we can in the belief that to the strongest belong the most spoils?  Or is living the “good life” really about developing behaviors concerning our urge to accumulate wealth that allow us to live more fully human lives?

I have been working (slowly) on editing a collection of Jewish sources through the ages that grapple with this problem.  Kristoff’s column got me wondering how one might imagine a more “Jewish” conversation (okay, not one that really is confined to Moses and the Torah).  I am not as clever as Kristoff and so will not try to reproduce an actual conversation but will emphasize the three (out of many possible) points that “Moses” might make:

  • The poor and vulnerable must be supported, but only to the level of sustenance.  We – each and every one of us, as individuals and a community – are obligated to support the needy.  No one in our communities should die of hunger, lack of shelter, or access to health care.  Yet while traditional Jewish sources do not make a moral hazard argument, they also rarely recognize a need to extend that support beyond sustenance.  The poor are free moral agents and must work hard.  At the same time, though, there is no shame to being poor; it is a sign neither of their moral standing nor of their character.  The vicissitudes of life threaten to bring us all to poverty in an instant and our treatment of the poor should recognize that.
  • There are people who take advantage of poor relief, but they are not our problem.  It is our responsibility to help the needy but not our job to ascertain that every claim to our help has a basis.  Traditional Jewish texts recognize that there will be abuse but also that the fear of abuse has negative consequences (i.e., it will give us an easy excuse not to give) and that the scale of this abuse will be relatively minor.  Communal institutions do have a role in minimizing the possibility of abuse but ultimately it is better for us to err on the side of generosity.
  • Capitalism is a good system but it needs heavy regulation.  The Torah prescribes two economic “reset buttons.”  The first, every seven years, cancels all debts.  The second, every fifty years, is a full economic redistribution.  Neither are practicable, but they represent an economic ideal based on the recognition that markets lead over time, inexorably, to increasing inequality.  Jewish texts recognize the importance of a free-market but also the need to control the natural excesses that it engenders: merchants, for example, are not free to price gouge and communities have the right to levy taxes for the public good.

I don’t think that Moses, any more than Jesus, was a social democrat.  But I also don’t think that either one would have much sympathy for the budget plans on the table.  Now if only I knew what they would say about the NEA or NEH….

Paying for College in 1803

by

When I pay our son’s college tuition I am given a variety of options, from full payment up-front to installment plans, but no matter how I pay I must use U.S. currency.  Which raises the question, before there was a standard U.S. currency, how did students pay their college tuition?

I have been reviewing the early laws and records of Rhode Island College (Brown University’s predecessor) and have found a number of unanticipated tidbits unrelated to the questions that I am researching.  One such tidbit concerns this issue of currency.  In the laws of 1793, most fees are payable in schillings and pence.  In the laws of 1835, standard U.S. currency is specified.  While the laws of 1803 though, mostly uses dollars and cents, it requires the payment of the tuition in advance of “one hundred ounces of silver.”

This raises two questions for me: (1) what was the status of U.S. currency in 1803, and (2) how much would this have translated into, in our terms?  As far as I can tell from the Wikipedia page, the Coinage Act, which established the U.S. dollar as our national currency, was passed in 1792.  It appears, though, that there was some suspicion about using the minted silver dollars for fear that they contained less silver than they should have.  It apparently took more than a decade to establish faith in the new currency, although a great deflation in 1802 certainly did not help build confidence.  According to the conversion chart also there, 100 ounces of pure silver would be worth approximately $118 at that time.  Using the formula found here, that equates into $1887 in today’s dollars (which is, curiously, very close to the spot price of 100 oz of silver today).  If this is right (could this really be right?) Brown would have been quite affordable to the middle class.  Of course, the gym was not as nice then.

Jewish Charity in Antiquity

by

The online forum Ancient Jew Review recently published three essays on Jewish charity in antiquity, by Alyssa Gray, Gregg Gardner, and Yael Wilfand.  I highly recommend these essays which together provide an excellent introduction to the state of research in this field.  My own response to them was also published here.

Jews and Money: A New Course

by

549Last year I co-taught a class called “Wealth: Religious Approaches” and ran a related workshop, “Jewish Approaches to Wealth and Poverty.”  I am now preparing the sources presented at the workshop for publication and will be teaching a new course based on these previous forays, called “Jews and Money.”  I had originally intended this course to be more about the religious texts, their approach to economic issues, and what we all might be able to learn from them.  As I worked on the course, though, I found myself entangled in a far more complex set of issues.  The result is this syllabus, for which I have the following blurb:

In the West, there has always been a complicated relationship between Jews and money.  On the one hand, Jews have disproportionately prospered in many places where they were given equal economic and political rights.  On the other, though, economic success was often accompanied by more virulent anti-Semitism.  In the first part of this course we will examine, both theoretically and empirically, the complex relationship between Jews, capitalism, socialism, nationalism, and anti-Semitism.  In the second part of the course we will return to the one aspect of the “cultural capital” that is sometimes said to have helped Jews to prosper: their religious tradition.  In this part we will examine traditional Jewish religious teachings on wealth and poverty in their historical contexts both to flesh out some of the issues raised in the first part of the course and, more importantly, to provide a fresh set of intellectual resources for considering our own approach to these issues in modern America.

As always, I welcome your feedback.  Should you desire an editable copy in Word email me.