Hacking the Economy

Kiryas Joel, N.Y., Lands Distinction as Nation’s Poorest Place – NYTimes.com

The poorest place in the United States is not a dusty Texas border town, a hollow in Appalachia, a remote Indian reservation or a blighted urban neighborhood. It has no slums or homeless people. No one who lives there is shabbily dressed or has to go hungry. Crime is virtually nonexistent.

This is why I have little regard for economics as a field of study, and why I think that most people overestimate their personal value when they use income as a metric.

The actual medium of exchange in any economy is social value, and money is merely an abstraction created in an attempt to measure and control social activity. The quality of such activity increases at first when a monetary system is introduced, because the use of money lubricates social interaction. But then the quality drops off as the money itself becomes an object of fascination for technocrats, who come to believe that monetary value represents some intrinsic value, which they can magically manipulate in order to get the results they want in society.

Kiryas Joel, N.Y., Lands Distinction as Nation’s Poorest Place – NYTimes.com

“It is, in a sense, a statistical anomaly,” Professor Helmreich said. “They are clearly not wealthy, and they do have a lot of children. They spend whatever discretionary income they have on clothing, food and baby carriages. They don’t belong to country clubs or go to movies or go on trips to Aruba.

“They’re not scrounging around, though. They’re not presenting a picture of poverty as if you would go to a Mexican neighborhood in Corona. They do have organizations that lend money interest-free. They’re also supported by members of the community who are wealthier — it’s not declarable income if somebody buys them a baby carriage.”

This is a puzzle for the corporate executive, the economist, the insurance underwriter, and the Marxian theorist (in other words, the most useless members of any society). Measurable economic value is purportedly the foundation of modern civilization, yet many people who ignore it seem to live in a more civilized society.

Mr. Szegedin, the village administrator, said critics tended to forget that state taxpayers were generally spared because thousands of village children are enrolled in religious schools. Nearby, the Monroe-Woodbury school district, with roughly the same school-age population, spends about $150 million annually, about one-third of which comes from the state. (Albany provides about $5 million of Kiryas Joel’s $16 million public school budget.)

“You also have no drug-treatment programs, no juvenile delinquency program, we’re not clogging the court system with criminal cases, you’re not running programs for AIDS or teen pregnancy,” he said. “I haven’t run the numbers, but I think it’s a wash.”


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