The Economics of Thanksgiving
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arisbe> Gary North's REALITY CHECK
>
> Issue 296 November 26, 2003
>
>
> THE ECONOMICS OF THANKSGIVING
>
>
> O give thanks unto the LORD; for he is good: for
> his mercy endureth for ever. O give thanks unto
> the God of gods: for his mercy endureth for ever.
> O give thanks to the Lord of lords: for his mercy
> endureth for ever (Psalm 136:1-3)
>
> This phrase appears in many of the psalms, but when
> you find the same phrase three times in a row, you can
> safely conclude that the writer was trying to make a point,
> and he thought the point was important. I know of no
> passage in the Bible where any other phrase appears three
> times in succession.
>
> Thanksgiving Day is an old tradition in the United
> States. It really did have its origins in Plymouth Colony,
> in the fall of 1621, when the Pilgrims who had survived
> their first year in New England invited Chief Massasoit to
> a feast, and he showed up with 90 braves and five deer.
> The feast lasted three days.
>
> http://www.joyfulheart.com/holiday/indian-thanksgiving.htm
>
> The first official Thanksgiving Day was celebrated on
> June 29, 1676, in Charlestown, Massachusetts, across the
> Charles River from Boston. Over a century later, George
> Washington proclaimed a day of thanksgiving on October 23,
> 1789, to be celebrated on Thursday, November 27. In 1863,
> Abraham Lincoln officially restored Thanksgiving as a
> wartime measure. He repeated this a year later. Links to
> these original source documents are posted here:
>
> http://grove.ufl.edu/~leo/lincoln2.html
>
> The holiday then became an American tradition.
>
>
> LINCOLN'S RELIGIOUS LANGUAGE
>
> Lincoln was a strange contradiction religiously. He
> was a religious skeptic, yet he invoked the rhetoric of the
> King James Bible -- accurately -- on many occasions. His
> political rhetoric, which had been deeply influenced by his
> reading of the King James, was often masterful. For
> example, when he spoke of the cemetery of the Gettysburg
> battlefield as "this hallowed ground," using the King James
> word for holy, as in "hallowed be thy name," he was seeking
> to infuse the battle of Gettysburg with sacred meaning -- a
> use of religious terminology that was as morally abhorrent
> as it was rhetorically successful. It is the sacraments
> that are sacred, not monuments to man's bloody
> destructiveness.
>
> In that same year, 1863, he used biblical themes in
> his October 3 Thanksgiving Day proclamation.
>
> It is the duty of nations as well as of men to
> own their dependence upon the overruling power of
> God; to confess their sins and transgressions in
> humble sorrow, yet with assured hope that genuine
> repentance will lead to mercy and pardon; and to
> recognize the sublime truth, announced in the
> Holy Scriptures and proven by all history, that
> those nations are blessed whose God is the Lord.
>
> He went on, in the tradition of a Puritan "Jeremiad"
> ("blessed are we; woe are we") sermon, to attribute the
> calamity of the Civil War to the nation's sins,
> conveniently ignoring the biggest contributing sin of all
> in the coming of that war: his own steadfast determination
> to collect the national tariff in Southern ports.
>
> In his proclamation, he made an important and accurate
> theological point.
>
> We have been the recipients of the choicest
> bounties of heaven; we have been preserved these
> many years in peace and prosperity; we have grown
> in numbers, wealth and power as no other nation
> has ever grown.
>
> But we have forgotten God. We have forgotten the
> gracious hand which preserved us in peace and
> multiplied and enriched and strengthened us, and
> we have vainly imagined, in the deceitfulness of
> our hearts, that all these blessings were
> produced by some superior wisdom and virtue of
> our own. Intoxicated with unbroken success, we
> have become too self-sufficient to feel the
> necessity of redeeming and preserving grace, too
> proud to pray to the God that made us.
>
> This observation leads to the same question that Moses
> raised long before Lincoln's proclamation: Why is it that
> men become less thankful when their blessings increase?
>
> Less than a decade after Lincoln's proclamation, three
> economists came up with the theoretical insight that
> provides an answer.
>
>
> MARGINAL UTILITY THEORY
>
> In the early 1870s, Karl Menger, William Stanley
> Jevons, and Leon Walras simultaneously and independently
> discovered the economic principle of marginal utility.
> Their discovery transformed economic analysis.
>
> They observed that value, like beauty, is subjectively
> determined. Value is imputed by each individual to scarce
> resources. Other things remaining equal, including tastes,
> the individual imputes less value to each additional unit
> of any good that he receives as income. This is the
> principle of marginal utility.
>
> This can be put another way. We can say that each
> additional unit of any resource that a person receives as
> income satisfies a value that is lower on that individual's
> subjective scale of value. He satisfied the next-higher
> value with the previous unit of income.
>
> This provides a preliminary solution to the original
> question. I call this solution the marginal utility of
> thankfulness. People look at the value of what they have
> just received as income, and they are less impressed than
> they were with the previous unit of income. They focus on
> the immediate -- "What have you done for me lately?" --
> rather than the aggregate level of their existing capital.
> They conclude, "What's past is past; what matters most is
> whatever comes next."
>
> Modern economic theory discounts the past to zero.
> The past is gone; it is not a matter for human action.
> Whatever you spent to achieve your present condition in
> life is no longer a matter for human action. The economist
> calls this lost world "sunk costs."
>
> There is a major problem in thinking this way. It is
> the problem of saying "thank you." The child is taught to
> say "thank you." He is not told to do this because, by
> saying "thank you," he is more likely to get another gift
> in the future. He is taught to say "thank you" as a matter
> of politeness.
>
> I am sure that there is some University of Chicago-
> trained economist out there who is ready to explain
> etiquette as a matter of self-interest: "getting more in
> the future for a minimal expenditure of scarce economic
> resources." And, I must admit, people who never say "thank
> you" do tend to receive fewer gifts. Or, as Moses put it,
> "And thou say in thine heart, my power and the might of
> mine hand hath gotten me this wealth. But thou shalt
> remember the LORD thy God: for it is he that giveth thee
> power to get wealth, that he may establish his covenant
> which he sware unto thy fathers, as it is this day."
> (Deuteronomy 8:17-18).
>
> However, Moses also added an "or else" clause: "And
> it shall be, if thou do at all forget the LORD thy God, and
> walk after other gods, and serve them, and worship them, I
> testify against you this day that ye shall surely perish"
> (verse 19). Professor Gary Becker, who is widely regarded
> as an expert on the economic theory of crime, would no
> doubt put it differently, but the point regarding reduced
> future income is the same: lower. Maybe way, way lower.
>
> The problem is, we look to the present, not to the
> past. We look at the marginal unit -- the unit of economic
> decision-making -- and not at the aggregate that we have
> accumulated. We assume that whatever we already possess is
> well-deserved -- merited, we might say -- and then we focus
> our attention on that next, hoped-for "util" of income.
>
> As economic actors, we should recognize that the
> reason why we are allocating our latest unit of income to a
> satisfaction that is lower on our value scale is because we
> already possess so much. We are awash in wealth. We are
> the beneficiaries of a social order based on private
> ownership and free exchange, a social order that has made
> middle-class people rich beyond the wildest dreams of kings
> a century and a half ago. Or, as P. J. O'Rourke has
> observed, "When you think of the good old days, think one
> word: dentistry."
>
> About half of the Pilgrims who arrived in Plymouth in
> 1620 were dead a year later. The Indians really did save
> the colony by showing the first winter's survivors what to
> plant and how to plant it in the spring of 1621. The
> Pilgrims really did rejoice at that festival. They were
> lucky -- graced, they would have said -- to be alive.
>
> So are we. Ludwig von Mises wrote somewhere (I wish I
> could remember where) that Charles Darwin was wrong. The
> principle of the survival of the fittest does not apply to
> the free market social order. The free market's division
> of labor has enabled millions of people to survive --
> today, billions -- who would otherwise have perished.
>
>
> CONCLUSION
>
> So, give thanks to God tomorrow, even if your only god
> is the free market. You did not obtain all that you
> possess all by yourself. The might of your hands did not
> secure it for you. A little humility is in order on this
> one day of the year. Yes, even if you earned a Ph.D. in
> economics at the University of Chicago. Most people know
> this, of course. They never earned a Ph.D. But it never
> hurts to remind ourselves, which is why we have Thanksgiving.
>
>
> -------------
>
> -- Been to the Daily Reckoning Marketplace Yet? --
>
> If not, you ought to see what you've been missing.
>
> Want to read more from our regular contributors? This
> is the place to find it.
>
> We've collected some of the best financial advice and
> commentary available anywhere and presented it to you
> all in one place. Take a look:
>
> http://www.dailyreckoning.com/marketplace.cfm
>
> -------------
>
> To subscribe to Reality Check go to:
>
> http://www.dailyreckoning.com/sub/GetReality.cfm
>
> -------------
>
> If you enjoy Reality Check and would like to read more
> of Gary's writing please visit his website:
>
> http://www.freebooks.com
>
> -------------
>
> If you'd like to suggest Reality Check to a friend,
> please forward this letter to them or point them to:
>
> http://www.dailyreckoning.com/sub/GetReality.cfm
>
> -------------
>
> E-mail Address Change? Just go to Subscriber Services:
>
> http://www.dailyreckoning.com/RC/services.cfm
>
> and give us your new address.
>
> *******
> Please note: We sent this e-mail to:
> Frank Purcell <mentor@arisbe.net>
> because you or someone using your e-mail address subscribed to this
> service.
>
> *******
> To manage your e-mail subscription, use our web interface at:
> http://www.agoramail.net/Home.cfm?List=RC-Only
> Or to end your e-mail subscription, send a blank e-mail to:
> RC-Only_unsub@agoramail.net
> To cancel or for any other subscription issues, write us at:
> Order Processing Center
> Attn: Customer Service
> P.O. Box 925
> Frederick, MD 21705
=====
Looking for an opportunity? http://arisbe.estarnetwork.com/.
>
> Issue 296 November 26, 2003
>
>
> THE ECONOMICS OF THANKSGIVING
>
>
> O give thanks unto the LORD; for he is good: for
> his mercy endureth for ever. O give thanks unto
> the God of gods: for his mercy endureth for ever.
> O give thanks to the Lord of lords: for his mercy
> endureth for ever (Psalm 136:1-3)
>
> This phrase appears in many of the psalms, but when
> you find the same phrase three times in a row, you can
> safely conclude that the writer was trying to make a point,
> and he thought the point was important. I know of no
> passage in the Bible where any other phrase appears three
> times in succession.
>
> Thanksgiving Day is an old tradition in the United
> States. It really did have its origins in Plymouth Colony,
> in the fall of 1621, when the Pilgrims who had survived
> their first year in New England invited Chief Massasoit to
> a feast, and he showed up with 90 braves and five deer.
> The feast lasted three days.
>
> http://www.joyfulheart.com/holiday/indian-thanksgiving.htm
>
> The first official Thanksgiving Day was celebrated on
> June 29, 1676, in Charlestown, Massachusetts, across the
> Charles River from Boston. Over a century later, George
> Washington proclaimed a day of thanksgiving on October 23,
> 1789, to be celebrated on Thursday, November 27. In 1863,
> Abraham Lincoln officially restored Thanksgiving as a
> wartime measure. He repeated this a year later. Links to
> these original source documents are posted here:
>
> http://grove.ufl.edu/~leo/lincoln2.html
>
> The holiday then became an American tradition.
>
>
> LINCOLN'S RELIGIOUS LANGUAGE
>
> Lincoln was a strange contradiction religiously. He
> was a religious skeptic, yet he invoked the rhetoric of the
> King James Bible -- accurately -- on many occasions. His
> political rhetoric, which had been deeply influenced by his
> reading of the King James, was often masterful. For
> example, when he spoke of the cemetery of the Gettysburg
> battlefield as "this hallowed ground," using the King James
> word for holy, as in "hallowed be thy name," he was seeking
> to infuse the battle of Gettysburg with sacred meaning -- a
> use of religious terminology that was as morally abhorrent
> as it was rhetorically successful. It is the sacraments
> that are sacred, not monuments to man's bloody
> destructiveness.
>
> In that same year, 1863, he used biblical themes in
> his October 3 Thanksgiving Day proclamation.
>
> It is the duty of nations as well as of men to
> own their dependence upon the overruling power of
> God; to confess their sins and transgressions in
> humble sorrow, yet with assured hope that genuine
> repentance will lead to mercy and pardon; and to
> recognize the sublime truth, announced in the
> Holy Scriptures and proven by all history, that
> those nations are blessed whose God is the Lord.
>
> He went on, in the tradition of a Puritan "Jeremiad"
> ("blessed are we; woe are we") sermon, to attribute the
> calamity of the Civil War to the nation's sins,
> conveniently ignoring the biggest contributing sin of all
> in the coming of that war: his own steadfast determination
> to collect the national tariff in Southern ports.
>
> In his proclamation, he made an important and accurate
> theological point.
>
> We have been the recipients of the choicest
> bounties of heaven; we have been preserved these
> many years in peace and prosperity; we have grown
> in numbers, wealth and power as no other nation
> has ever grown.
>
> But we have forgotten God. We have forgotten the
> gracious hand which preserved us in peace and
> multiplied and enriched and strengthened us, and
> we have vainly imagined, in the deceitfulness of
> our hearts, that all these blessings were
> produced by some superior wisdom and virtue of
> our own. Intoxicated with unbroken success, we
> have become too self-sufficient to feel the
> necessity of redeeming and preserving grace, too
> proud to pray to the God that made us.
>
> This observation leads to the same question that Moses
> raised long before Lincoln's proclamation: Why is it that
> men become less thankful when their blessings increase?
>
> Less than a decade after Lincoln's proclamation, three
> economists came up with the theoretical insight that
> provides an answer.
>
>
> MARGINAL UTILITY THEORY
>
> In the early 1870s, Karl Menger, William Stanley
> Jevons, and Leon Walras simultaneously and independently
> discovered the economic principle of marginal utility.
> Their discovery transformed economic analysis.
>
> They observed that value, like beauty, is subjectively
> determined. Value is imputed by each individual to scarce
> resources. Other things remaining equal, including tastes,
> the individual imputes less value to each additional unit
> of any good that he receives as income. This is the
> principle of marginal utility.
>
> This can be put another way. We can say that each
> additional unit of any resource that a person receives as
> income satisfies a value that is lower on that individual's
> subjective scale of value. He satisfied the next-higher
> value with the previous unit of income.
>
> This provides a preliminary solution to the original
> question. I call this solution the marginal utility of
> thankfulness. People look at the value of what they have
> just received as income, and they are less impressed than
> they were with the previous unit of income. They focus on
> the immediate -- "What have you done for me lately?" --
> rather than the aggregate level of their existing capital.
> They conclude, "What's past is past; what matters most is
> whatever comes next."
>
> Modern economic theory discounts the past to zero.
> The past is gone; it is not a matter for human action.
> Whatever you spent to achieve your present condition in
> life is no longer a matter for human action. The economist
> calls this lost world "sunk costs."
>
> There is a major problem in thinking this way. It is
> the problem of saying "thank you." The child is taught to
> say "thank you." He is not told to do this because, by
> saying "thank you," he is more likely to get another gift
> in the future. He is taught to say "thank you" as a matter
> of politeness.
>
> I am sure that there is some University of Chicago-
> trained economist out there who is ready to explain
> etiquette as a matter of self-interest: "getting more in
> the future for a minimal expenditure of scarce economic
> resources." And, I must admit, people who never say "thank
> you" do tend to receive fewer gifts. Or, as Moses put it,
> "And thou say in thine heart, my power and the might of
> mine hand hath gotten me this wealth. But thou shalt
> remember the LORD thy God: for it is he that giveth thee
> power to get wealth, that he may establish his covenant
> which he sware unto thy fathers, as it is this day."
> (Deuteronomy 8:17-18).
>
> However, Moses also added an "or else" clause: "And
> it shall be, if thou do at all forget the LORD thy God, and
> walk after other gods, and serve them, and worship them, I
> testify against you this day that ye shall surely perish"
> (verse 19). Professor Gary Becker, who is widely regarded
> as an expert on the economic theory of crime, would no
> doubt put it differently, but the point regarding reduced
> future income is the same: lower. Maybe way, way lower.
>
> The problem is, we look to the present, not to the
> past. We look at the marginal unit -- the unit of economic
> decision-making -- and not at the aggregate that we have
> accumulated. We assume that whatever we already possess is
> well-deserved -- merited, we might say -- and then we focus
> our attention on that next, hoped-for "util" of income.
>
> As economic actors, we should recognize that the
> reason why we are allocating our latest unit of income to a
> satisfaction that is lower on our value scale is because we
> already possess so much. We are awash in wealth. We are
> the beneficiaries of a social order based on private
> ownership and free exchange, a social order that has made
> middle-class people rich beyond the wildest dreams of kings
> a century and a half ago. Or, as P. J. O'Rourke has
> observed, "When you think of the good old days, think one
> word: dentistry."
>
> About half of the Pilgrims who arrived in Plymouth in
> 1620 were dead a year later. The Indians really did save
> the colony by showing the first winter's survivors what to
> plant and how to plant it in the spring of 1621. The
> Pilgrims really did rejoice at that festival. They were
> lucky -- graced, they would have said -- to be alive.
>
> So are we. Ludwig von Mises wrote somewhere (I wish I
> could remember where) that Charles Darwin was wrong. The
> principle of the survival of the fittest does not apply to
> the free market social order. The free market's division
> of labor has enabled millions of people to survive --
> today, billions -- who would otherwise have perished.
>
>
> CONCLUSION
>
> So, give thanks to God tomorrow, even if your only god
> is the free market. You did not obtain all that you
> possess all by yourself. The might of your hands did not
> secure it for you. A little humility is in order on this
> one day of the year. Yes, even if you earned a Ph.D. in
> economics at the University of Chicago. Most people know
> this, of course. They never earned a Ph.D. But it never
> hurts to remind ourselves, which is why we have Thanksgiving.
>
>
> -------------
>
> -- Been to the Daily Reckoning Marketplace Yet? --
>
> If not, you ought to see what you've been missing.
>
> Want to read more from our regular contributors? This
> is the place to find it.
>
> We've collected some of the best financial advice and
> commentary available anywhere and presented it to you
> all in one place. Take a look:
>
> http://www.dailyreckoning.com/marketplace.cfm
>
> -------------
>
> To subscribe to Reality Check go to:
>
> http://www.dailyreckoning.com/sub/GetReality.cfm
>
> -------------
>
> If you enjoy Reality Check and would like to read more
> of Gary's writing please visit his website:
>
> http://www.freebooks.com
>
> -------------
>
> If you'd like to suggest Reality Check to a friend,
> please forward this letter to them or point them to:
>
> http://www.dailyreckoning.com/sub/GetReality.cfm
>
> -------------
>
> E-mail Address Change? Just go to Subscriber Services:
>
> http://www.dailyreckoning.com/RC/services.cfm
>
> and give us your new address.
>
> *******
> Please note: We sent this e-mail to:
> Frank Purcell <mentor@arisbe.net>
> because you or someone using your e-mail address subscribed to this
> service.
>
> *******
> To manage your e-mail subscription, use our web interface at:
> http://www.agoramail.net/Home.cfm?List=RC-Only
> Or to end your e-mail subscription, send a blank e-mail to:
> RC-Only_unsub@agoramail.net
> To cancel or for any other subscription issues, write us at:
> Order Processing Center
> Attn: Customer Service
> P.O. Box 925
> Frederick, MD 21705
=====
Looking for an opportunity? http://arisbe.estarnetwork.com/.