Volume 5, Number 126
7 July 2005

Editor's Note: We have had so many responses to TQE #125 on "Leadings" that it seemed appropriate to dedicate an entire letter to Jack's reply. Thanks to all of you who responded! A quick reminder: if you want your reply to be published in the online edition of TQE, then be sure to send it to [email protected]. Any email that is sent directly to Jack will be considered private, and not for publication. — LC.

Commentary on "Leadings"

by Jack Powelson

Dear Friends,

I sent TQE #125 on "Leadings" to Friends who attended the Inter-Mountain Yearly Meeting (IMYM), and have had several replies. Many spoke of the IMYM plenary speaker as "inspiring" or "forceful." After reading her talk I didn’t see it that way. Probably I should have attended it, but an emergency called me away (I was visiting my wife in the hospital; she’s okay now).

Several Friends agreed with my thinking, and I appreciate your support. Over the years I have been so lambasted  by Friends because I do not see eye to eye with them on many economic matters, that I have often thought of leaving Quakers. One Friend said she was saddened by Friends being just as closed-minded and arbitrary as those they criticize. President Bush and unprogrammed Friends are very much alike. Both feel they have direct word from God and see no reason to analyze further. I stick around because I strongly believe in the Inner Light and Friends’ worship.

Some Friends have told me I am an "arrogant know-it-all." I have been aware for years that Friends have thought of me this way. But all I want is for Friends to think before they take actions as Friends on economic matters. To me, it matters not whether they are "right" or "left" politically. If we find we all think alike (except on war, cruelty, etc.), we must question our spirituality.

One Friend sent a list of articles, some by economists, who favor increased minimum wages. There is a simple "law" in economics: if the price of any good increases, people buy less of it, or occasionally the same amount. (Exceptions are made for inferior goods, but they are not relevant here.) Many economists have challenged this law, trying to prove it wrong. Usually they act on ideological lines, and their research is biased. For example, an argument by two Princeton economists was cited by the Clinton administration to justify higher minimum wages. A bevy of other economists wrote why their research was biased. But that is not the basic question for Friends.

Two basic questions confront Friends:

  1. When economists disagree, how do Friends choose between them?
  2. Should Friends lobby for a law forcing small businesses — even a single one — to close down, and its workers to quit?

In the case of (2), many economists say, "Yes, it is for the greater good," and many do not. Do we Quakers say Yes? Do all of us? Is a higher minimum wage some Quaker principle, like the Inner Light? The FCNL has come out in favor of higher minimum wages, and a petition to Congress was circulated in my Meeting in favor. So, is this part of Quaker dogma? When I joined Quakers sixty years ago, I was told we have no dogma.

What kind of arguments sway me? Those that tell me my facts are wrong or how I have reasoned improperly. I have been known to change my mind — indeed, many times. I was even a socialist before I had studied economics: I met and admired socialist Norman Thomas and was friends with his brother Evan. At Harvard I studied economics two years under a socialist, Paul Sweezy, but I did not realize he was a socialist until after I had graduated. He taught me economics, not socialism.

One reader said that my message sounded like the "old capitalist line" again, but he did not say what was wrong with that. Another pointed out that a professor in Bolivia disagreed with me about natural gas in his country. But I am not swayed by where a person is from unless he presents correct facts and a rational argument. Incidentally, I was a university professor myself in Bolivia for one year. One reply told me that the keynote speaker at IMYM had said we should "see that of God" in Bush and his team. Of course. But why not John Kerry and Ted Kennedy?

Over the sixty years I have been a Quaker, I have heard many times about "love" and "that of God." I am waiting for some Quaker to say that "that of God" in Bush means we should understand his reasons for going to war in Iraq (what are they, truly?) and respect them because he is a creature of God, even though we disagree on both facts and interpretations.

One Friend thought that maquiladora workers were exploited in Mexico, but his only reason was that they do not earn wages as high as in the United States. Unfortunately, they can't earn those wages in Mexico, and they cannot legally cross the border. So firms jump the border legally and hire them in Mexico. Actually, on average maquiladoras pay higher wages than other employers in the rest of Mexico. I believe there should be more maquiladoras, not fewer. As a matter of fact, firms are going more to China now, and the Mexican government is not happy over this.

That same Friend thought workers should be paid a "living wage." (How could they "live" otherwise?) But a "living wage" is relative to wages of middle-class American families today. There is only one way to raise real wages: train workers so they become more productive.

Over the centuries US and European workers have lived on less than the real minimum wage today, and so do workers today in the less developed world. A "living wage" higher than market wages is just like a minimum wage: it causes unemployment, bankrupts small businesses, and it starts an inflation that leaves workers where they were before.

One Friend at IMYM chastised himself for not "listening" to the kids in a talent night Bush-bashing play. For ten years I conducted seminars (in Spanish) with Marxist students all over Latin America (Argentina to Mexico), with whom I mostly disagreed. I listened to them, but over time I decided they were wrong, in both facts and interpretations. Having only 24 hours per day I wanted to diversify my listening, so I spent time with other philosophies.


The Quaker Economist announces with pride and pleasure the online publication of A History of Wealth and Poverty: Why Some Nations are Rich and Many Poor, by Jack Powelson.

Originally published in 1994 by the University of Michigan Press as Centuries of Economic Endeavor, this new electronic edition is now available to the public at no cost. Click here to see the Table of Contents.

Two kinds of principles seem to be adopted by unprogrammed Friends. One is that a set of practices is morally wrong. This includes war, torture, and beating children (or anyone). I agree with these. Others include economic matters such as minimum wage and social security. In each case, Friends might consider whether God leads others elsewhere, e.g., the American President or Muslim rebels. Let us make Friends our spiritual base and lobby through secular organizations.

Peace to all of you.

Your friend, Jack Powelson

Readers' Comments:

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As someone trained in economics (MS at Kansas State and PhD studies at Iowa State — passed comps but didn't submit dissertation), plus 6 years on the faculty at Michigan State, and having spent 30+ years in Quakerism, I've decided that Quakers and myself are a highly empathic group with the needy of the world. That empathy sometimes dictates over the benefits of theory (reason) and history (experience).

Empathic folks often want to "wish" an order onto the world that defies reason and experience. I give them excellent marks for their intentions but poor marks for their judgments. AFSC's recent opposition to CAFTA is such an example.

Consequently, my 30+ yrs result that I have decided that what folks bring to the decision process is really a summation of what their intellect and emotions provides, and not really anything "divine."

Hence I did resign my membership from my Meeting as the basic tenet of Quakerism is that, as George Fox said, "Jesus has come to teach his people" a belief in mystical inspiration, and I can no longer label myself with something I don't believe. Sadly,

— Jim Booth.

I have often commented on the contrast between the anti-business bias I notice in my Friends Meeting and the approach of the Mennonites. The Mennonites encourage people to start up a businesses and make money and they do a great deal in the Third World in the micro-loan area with great success.

— Howard Baumgartel, Oread Friends Meeting, Lawence, KS.

I think you made a technical error in TQE #126: you confused a "Giffen's Paradox" good with an "inferior good." An inferior good is one whose consumption decreases as income increases. The price effect always reduces consumption as the price increases, and for consumption to increase as the price increases, the negative effect of the price effect must be more than offset by the income effect for the inferior good. My memory is hazy, but I think Giffen was talking about oats in Scotland, or potatos in Ireland, or something like that. There are lots of inferior goods, but for consumption to go up as the price goes up, we need the rare example of some basic staple for very poor people. All this, of course, has no effect on your argument in the letter. Some economists talk of "prestige goods" whose consumption increases along with increases in their price, but they are not talking of "economic man."

— William G. Rhoads.

Fact 1. You can only pay people what they earn. When I bought Universal Wood, we were paying little over the minimum. Today our salaries are close to $30,000 (including health care) for production workers, who now make basic decisions to improve quality and efficiency. They are earning it. We as friends have an obligation to cause people to make more money.

Fact 2.  Sweatshops do not make for good business. We are working with our Chinese supplier/partner to get them to a living wage by SA-8000 standards.  They already appear to have a safe working environment. A living wage in China is not a “middle class American wage.”  We have some quality issues with our Chinese supplier. Consistent superior quality is worth more money.

Fact 3. Today many companies are global, and outsource. Their first source may in turn outsource, and thus we have a supply chain. We are responsible to our customers for the timeliness and quality of our products wherever purchased.  We are also responsible for the human condition in the same supply chain.

In my judgement, businesses run properly can be a force for world peace.  Much of your analysis is correct, but let us go a step beyond and thing of the larger issue — world peace. 

— Lee B. Thomas, Jr.,  Louisville Friends meeting.

Can you educate me please? When sovereign debt is "forgiven", whose money is being "lost"? How does the mechanism actually work? I thought it was taxpayers contributions to institutions like the World Bank. Am I right?

— Stephen Beesley, Attender, High Wycombe PM (England), and Isle of Man PM (British Isles).

Amen. It's not that these economic issues aren't important to us as Friends but that they aren't the center of our faith. Our face to the world, however, is a series of litmus tests for membership. A person must believe in the holy trinity of global warming, the United Nations, and no change to Social Security before even getting in the door. Then, of course, there's minimum wage, sustainability and George W. Bush. I'm with the program on many of these but they are all issues that I get my information about from non-Quaker sources. Making our public face a political face is one main reason why we are such a small and unappealing religion. We don't let people know we deliver solice and support to searching souls — we only hand out the brochures on globalization. How comforting.

What Quakers really offer and we never let anyone know about is a radical worship that sits each of us equal before God, believing that any of us might be called to do God's work and that we might come to know something of the divine directly without clerical intermediaries. When I look across the religious landscape and see houses of worship where women are sent to the balconies or corners or kept from the inner sanctums, where one must call the holy spirit by one name and one name only, and where violence is an okay form of religious expression, I see where our work as religious people ought to be taking place.

Jack's prescriptions for economic justice are not the center of the faith either, but he knows that. Let's keep talking about the minimum wage but not confuse that issue with the source of our spiritual power. And let's make comfortable room on the benches for true diversity.

— Signe Wilkinson.

You are definitely right on what "the questions for Quakers" are in regard to political and economic issues, minimum wages in particular. How can Quakers, who claim to believe in the Light in each individual, fall into the utilitarian ethic that pro-minimum wage arguments require?

Actually, I have a tough time believing that Quakers, as pacifists, can claim that the government should forcefully intervene in the economy at all. All interventions are, ultimately, backed by the threat of violence of some kind.

Pacifism and government interventionism of any kind just don't mix. Thanks again for your well-reasoned perspective.

— Lucas M. Engelhardt, First Friends Church of Canton, Oh. (EFC-ER)

Reply: This Friend speaks my mind. I am very glad to hear that at least one other pacifist agrees with me on this issue. — Russ Nelson (publisher of The Quaker Economist).


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Publisher: Russ Nelson, St. Lawrence Valley (NY) Friends Meeting

Editorial Board

  • Loren Cobb, Boulder (CO) Friends Meeting, Editor.
  • Chuck Fager, Director, Quaker House, Fayetteville, NC.
  • Virginia Flagg, San Diego (CA) Friends Meeting.
  • Valerie Ireland, Boulder (CO) Friends Meeting.
  • Jack Powelson, Boulder (CO) Meeting of Friends.
  • Norval Reece, Newtown (PA) Friends Meeting.
  • J.D. von Pischke, a Friend from Reston, VA.
  • John Spears, Princeton (NJ) Friends Meeting.
  • Geoffrey Williams, Attender at New York Fifteenth Street Meeting.

Members of the Editorial Board receive Letters several days in advance for their criticisms, but they do not necessarily endorse the contents of any of them.

Copyright © 2005 by Jack Powelson. All rights reserved. Permission is hereby granted for non-commercial reproduction.

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