What Happened Today: October 24, 2022
Xi Jinping consolidates power with third term; Sunak to lead Britain; recession bubbling in the Eurozone
The Big Story
China’s currency fell to its lowest level in trading against the U.S. dollar in 14 years on Monday after Chinese leader Xi Jinping clinched his third five-year term as head of state at a Communist Party summit over the weekend. Financial analysts fear that China’s ongoing economic instability could become more volatile now that Xi has consolidated his rule by appointing loyalists, some without much economic experience, to the Politburo Standing Committee, China’s highest decision-making body.
At the party congress, once an occasion for party leaders to begin grooming their successors, Xi, 69, did not signal any potential heir to his office. Surrounding himself with loyalists and close allies within the Politburo leaves few, if any, high-ranking party members in a position to challenge Xi on crucial economic decisions. “Xi’s power play is negative for markets and China’s long-term trajectory because it removes officials with the inclination and ability to moderate his policies,”wrote Michael Hirson, a China markets analyst at 22V Research.
In a speech, Xi laid out a series of new priorities that included greater state management of key industries, including energy, technology, and the nation’s food system—moves that could sacrifice productivity and efficiency for the sake of more direct control by the ruling party. It remains to be seen to what extent Xi will prioritize a strong economic recovery by scaling back his draconian zero-Covid policy, which has led to long, intense lockdowns that have distressed businesses and exacerbated a spiraling property market.
In the Back Pages: The Christian Origins of Free Market Thought
The Rest
→ Vowing “stability and unity” Rishi Sunak, 42, is set to become Britain’s third prime minister in seven weeks. The youngest to hold the office in two centuries, and the first prime minister of color, Sunak, who now leads the Conservative Party, was the last candidate standing to replace Liz Truss after her tax proposal tanked the pound and prompted a revolt within the Conservative party. He is also the first Prime Minister whose family hails from India, a former British colony. Sunak’s stature rose during the COVID-19 pandemic when, as a newly appointed chancellor, his plan to disperse billions in aid from the Treasury shored up the labor force. Along with fixing runaway inflation, Sunak will have to address Britain’s deepening discontent with the ruling Conservatives. Recent polls show support for the opposition Labor Party is 30 points ahead, just as Labor leaders ratchet up their calls for a general election.
→ More and more Americans are dying each year because of fentanyl, the potent and highly addictive synthetic opioid. Of the 70,000 Americans killed by fentanyl last year, most encountered the drug mixed with heroin. But now fentanyl is increasingly being found laced in cocaine, a drug popular among “high-achieving New Yorkers,” as The Wall Street Journal put it—or, said differently, more affluent users than the typical profile of a fentanyl user. According to the New York City Health Department, 81% of New York City’s 980 cocaine overdoses in 2020 involved fentanyl. Three such deaths were all traced to a single dealer, whose cocaine contained deadly amounts of the opioid. “Hey try not to do too much because it’s really strong,” the dealer texted one of his customers, a 38-year-old social worker who lived in the West Village, several hours after the delivery. She was found dead the next day.
→ Throwback of the Day:
In this diary video from a journalist sent to cover Belfast, Northern Ireland, during the devastating Troubles of the 1970s, the broadcaster explains that the assignment, “the journalistic equivalent of drawing the short straw,” is actually “much worse than it looks.” Trying to capture slice-of-life interviews, the journalist is continually brushed off by his potential subjects, who take great delight in telling him “my mother is in fact my father, or to use a regional vernacular, your ma is your da.”
→ Number of the Day: 26%
The number of the United States’ eighth graders who are proficient in mathematics, according to data from the National Assessment of Educational Progress, marking an 8% decrease since prior to the COVID-19 pandemic. For 9-year-olds, there was the first-ever decline in math scores and the largest decrease in reading proficiency since the 1980s. The dire assessment provides yet more evidence of the devastating toll pandemic-era school closures had on U.S. children, with data underscoring the fact that the policies’ largest impact was on the United States’ most economically disadvantaged students. Last year, more than $100 billion were set aside to help schools and students recover from these school closures, but the new data suggests that this wasn’t nearly enough, leading some researchers and policy makers to call for hundreds of billions more.
→ The 16-year-old who pled guilty to killing four and injuring seven people after a high school shooting in Michigan last year became the first U.S. school shooter to be convicted of terrorism on Monday. Initially submitting a not guilty plea to all 24 charges against him, the teenager pivoted to a complete admission of guilt, which will negate the need for a trial, a development welcomed by family members of the victims. In February 2023, the defendant will receive either a life sentence, which is unusual for a juvenile, or a sentence with an eventual chance at parole. The boy’s parents also face charges, with prosecutors alleging their culpability in the shooting because they provided their son a gun and ignored school officials who warned them about his issues with mental health.
→ Graph of the Day:
→ The Eurozone just saw its fourth straight quarter of economic contraction and its largest drop in nearly two years, another indication that a recession looms. “Given the steepening loss of output and deteriorating demand,” said the chief business economist at S&P Global, which gathers and analyzes this economic data, a recession looks “increasingly inevitable.” The Eurozone is struggling with the same macroeconomic factors that are crippling economies worldwide: inflated food and fool prices exacerbated by the sudden loss of Russia’s usually cheap and plentiful energy supply. The analysts at S&P did note one piece of potentially positive news: Costs began going down last quarter, and supply chain woes eased across sectors. It is unclear, however, if this suggests that prices have hit their peak and are now coming down or if they’ll stick stubbornly at their currently high levels.
→ The 1973 Academy Awards are perhaps best remembered for Marlon Brando’s decision to boycott the ceremony and send the activist Sacheen Littlefeather onstage to reject his award in protest over Hollywood’s depiction of Native Americans. Littlefeather introduced herself to America—“I’m Apache and president of the National Native American Affirmative Image Committee”—before going on to denounce the film industry’s racist portrayals of Indians and the federal government’s response to the Native American occupation of Wounded Knee. It seems, however, that Brando miscast Littlefeather for this role, as her sisters have now come forward, weeks after Littlefeather’s death at the age of 75, to correct the record. “It’s a lie,” one sister said of Littlefeather’s Indian identity, in an exclusive interview with the San Francisco Chronicle. “It’s a fraud,” added the other. A look at public records confirms the same: Littlefeather, née Cruz, was of Hispanic and white origin. Also a lie was Littlefeather’s account of a hardscrabble childhood, growing up in a “shack” with no toilet. “Our house had a toilet,” one of the sisters said, annoyed. “Okay, I have pictures of it. Of course we had a toilet.”
→ Video of the Day:
The 20th National Congress of the Communist Party of China, which meets every five years and which concluded on Saturday, was a synchronized show of national support for Xi Jinping, who will now lead the country for a third term. Video taken by Agence-France Presse, however, captured as yet unexplained footage of the country’s former president Hu Jintao, who served from 2002 to 2012, being forcibly removed from his chair in the front row beside Xi. A confused Hu appears reluctant to leave and appeals to Xi, who turns away to gaze across the room benignly. The incident took place shortly after foreign journalists were welcomed into the auditorium, leading to speculation that while the forced removal surprised Hu, it played like staged theater for Xi.
Additional reporting and writing provided by The Scroll’s associate editor, David Sugarman, and Clayton Fox
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The Christian Origins of Free Market Thought
Early thinkers sought to turn religious self-interest into a counterbalance to earthly greed
By Jacob Soll
Early Christianity sought converts by convincing them that real wealth lay in the “treasure” of heaven and salvation and not on earth. In the Gospels of Saint Luke, Jesus exhorted Christians to “Sell that ye have, and give alms; provide yourselves bags which wax not old, a treasure in the heavens that faileth not, where no thief approacheth, neither moth corrupteth.” In seeking to turn religious self-interest into a counterbalance to earthly greed, early Christian thinkers laid the foundations of market thought more the 1,600 years before Adam Smith wrote The Wealth of Nations—inspired not by the idea of creating wealth, but instead of seeking poverty.
Christianity provided a new, highly transactional vision of religion that had not existed in Judaism, based on the idea that Christ himself had made the ultimate exchange in trading his blood to pay the collective debt of humanity. Forgoing earthly goods was also about reining in the lasciviousness of pagan culture: The Christian Fathers believed that virginity and the renunciation of sexual pleasure were central to the commerce of salvation. Popular among early Christians of the first century CE, the Sentences of Sextus explained that “conquering the body” not only meant giving up physical pleasure, it also gave one the discipline to “give everything possible to the poor.” By “relinquishing the things of the flesh,” humans could acquire the things of the soul.” Here was an early market mechanism that traded desire for peace and salvation. The famous early Christian thinker Origen went so far as to castrate himself in the quest for self-denial that would help bring about heavenly peace.
Saint John of Chrysostom (347-407 CE) was most eloquent in his vision of a new spiritual marketplace. He claimed that earthly economics simply did not work. He questioned why people would go into debt for ephemeral earthly possessions when they could, instead, forgo money altogether to “gain the profit” of an “easy ascent to heaven.” “A woman who pays alms to the poor,” he claimed, “has her own bill of sale that she holds in her hands,” which could be exchanged for the treasures of heaven. “Give bread,” Chrysostom exclaimed, “and seize paradise.”
A rich and powerful Roman nobleman and Bishop of Milan in 371 CE, Saint Ambrose crystalized the late antique vision of an ideal Christian market. Nothing was useful, Ambrose insisted, except that which “will help us to the blessing of eternal life.” Good men and leaders, he insisted, should never desire “filthy lucre” like Syrian traders and Gilead merchants” (meaning Jews and Muslims). Above all, Christians should not hoard wealth which was earthly, and could “rot” and be eaten by “worms.” The best way to spur the divine marketplace was to put money into circulation by bestowing it on the poor. Indeed, Ambrose felt the same about sexual pleasure and promoted virginity. In return for renouncing wealth and passion, one would receive the “friendship of the saints and eternal habitations.”
Most importantly, Ambrose described Jesus’ self-sacrifice as a commercial, divine exchange by which, out of “divine liberality,” he gave his blood on the cross in exchange for human redemption. It was a remarkable insight: Desire could drive a market.
Of all the Church Fathers, Saint Augustine (354-430 CE) would have the strongest influence on economic thought. Augustine believed that God created a self-regulating order in the Christian universe through predestination. This meant that God not only chose which souls were to be saved in heaven, but also which of his flock would be rich on earth. This did not absolve good rich Christians of the responsibility to freely give their money to the Church. It meant that if they were rich it was by the will of God so that they could in turn give money to the Church. Thus, humans had to focus on never being “slaves of desire,” but in maintaining an almost Stoic discipline in earning wealth for holy means.
These ascetic attitudes, based on the scriptures, flourished in reaction to the inequities and depravities of Roman society. When Rome fell in the 400s, Europe entered a long period of economic stagnation, in which asceticism was an easy sell. But in the 1100s, the European population and economy began to expand, which led in turn to the rise of cities and material wealth, in particular in northern Italy. With the rise of a wealthy merchant class, figures such as Saint Thomas of Aquinas looked for ways to make wealth moral, while Saint Francis of Assisi looked to find a moral path within a world that visibly embraced material riches.
While early Christian thought did not provide the tools for capitalism, it still provided a market language and enduring skepticism that pure, amoral economic interest might not always turn out to be a public virtue. Medieval theologians of the Church—Scholastic thinkers—looked to calculate the just price of things, according to moral considerations. The challenge for Scholastic thinkers was to establish what was the fair and moral price for a product or service, and how to calculate the equal values in order to fit trade into a Christian moral framework.
Read the rest here: https://www.tabletmag.com/sections/history/articles/christian-origins-free-market-thought