Category: Economic Freedom

“Globalization must do more than connect elites and big businesses that have the legal means to expand their markets, create capital, and increase their wealth.” –Hernando de Soto

6898950_7a0fd3b3d9_bWhen assessing the causes of the recent boom in global prosperity, economists and analysts will point much of their praise to the power of free trade and globalization, and rightly so.

But while these are important drivers, we mustn’t forget that many people remain disconnected from networks of productivity and “circles of exchange.” Despite wonderful expansions in international free trade, much of this has occurred between “outsiders,” with many partners still languishing due to a lack of internal free trade within their countries.

Much of this is due to an absence of basic property rights, as economist Hernando de Soto argues throughout his popular book, The Mystery of Capital. If the global poor don’t have the legal means or incentives to trade beyond families and small communities, so-called “globalization” will still leave plenty behind. (more…)

The highly popular “buy-one, give-one” models — as epitomized by the popular TOMS Shoes brand — have long held the attention of Western do-gooders. It’s quick, it’s easy, and hey, people like the shoes. And let’s not forget the power of the Warm & Fuzzies.

Yet many are beginning to raise concerns about the actual impact of these activities. As Acton’s Michael Matheson Miller recently explained in an interview with Knowledge@Wharton, “The one-for-one model can undermine local producers. When you give free things, why would you buy local shoes?”

In the debut of his new smarty-pants comedy show, “Adam Ruins Everything,” Adam Conover chooses to set his sights on precisely this:

To their credit, TOMS Shoes has taken certain steps to reconsider its model, including a decision to “employ 100 Haitians and build a ‘responsible, sustainable’ shoe industry in Haiti.” But alas, by all public appearances, there is still a ways to go. (more…)

Blog author: dpahman
Thursday, September 24, 2015

Today at the Library of Law and Liberty, I take a cue from probablist Nassim Nicholas Taleb and call for the commemoration of a National Entrepreneurs Day:

One has been proposed in the U.S. House of Representatives, and probabilist Nassim Taleb has given us a fully developed argument as to why we should have one. I second the motion. In Antifragile, his 2012 book, Taleb confesses that he is “an ingrate toward the man whose overconfidence caused him to open a restaurant and fail, enjoying my nice meal while he is probably eating canned tuna.”

This lack of gratitude is a moral failing of all of us in modern society, says Taleb. Hence his idea:

In order to progress, modern society should be treating ruined entrepreneurs in the same way we honor dead soldiers, perhaps not with as much honor, but using the exact same logic. . . . For there is no such thing as a failed soldier, dead or alive (unless he acted in a cowardly manner)—likewise, there is no such thing as a failed entrepreneur or failed scientific researcher.


pope-oreoBased on their latest headline, it looks like someone from the Acton Institute is writing for the The Onion:

Pope Francis Reverses Position On Capitalism After Seeing Wide Variety Of American Oreos

As the article says:

Admitting the startling discovery had compelled him to reexamine his long-held beliefs, His Holiness Pope Francis announced Tuesday that he had reversed his critical stance toward capitalism after seeing the immense variety of Oreos available in the United States. “Oh, my goodness, look at all these! Golden Oreos, Cookie Dough Oreos, Mega Stuff Oreos, Birthday Cake Oreos—perhaps the system of free enterprise is not as terrible as I once feared,” said the visibly awed bishop of Rome while visiting a Washington, D.C. supermarket, adding that the sheer diversity of flavors, various colors and quantities of creme filling, and presence or absence of an outer fudge layer had led to a profound philosophical shift in his feelings toward the global economy and opened his eyes to the remarkable capabilities of the free market.

Sadly, the article is only satire. But buried underneath the humor is a serious question worth considering: What does our abundance of choice say about our economic system? As I wrote in my post on “3 Things I Wish Pope Francis Knew About a Free Economy“:

socialism-0916After getting home from work you get a statement in the mail from the local government saying you owe $20,000 for college tuition. You’re surprised to receive the bill since (a) you never went to college yourself and (b) your own children are still in preschool. Upon reading the fine print you discover the expected payment is not to cover any costs you’ve incurred but to pay for the tuition of college students in your neighborhood.

Outraged, you turn to your neighbors to complain about the injustice. They assure you, though, that this is nothing to be concerned about. Americans aren’t paying more for college tuition, one explains, “The only change is how we now pay for college.” Before, individuals were expected to cover their costs of attending college. Now, everyone is expected to pay. “So you see,” another says cheerfully, “there’s no real change.”

After hearing this you would probably want to move to a new neighborhood since you are surrounded by people who can’t distinguish between your money and a collective pool of cash that can be distributed at the whim of the government.

Unfortunately, this isn’t a completely hypothetical scenario. This is the actual rationale some people are making to justify presidential candidate Sen. Bernie Sanders proposal for $18 trillion in spending. In the Washington Post, Paul Waldman says,

So far, 2015 has given us our busiest Acton Lecture Series ever, and we’re pleased to share more of it with you today on the PowerBlog. Back on April 16, Acton had the privilege of hosting Wayne Grudem and Barry Asmus, who spoke on the topic of the book they jointly authored, The Poverty of Nations: A Sustainable Solution.

First, the bios: Wayne Grudem is Research Professor of Theology and Biblical Studies at Phoenix Seminary; he is the author or co-author of twenty books, including his Systematic Theology: An Introduction to Biblical DoctrinePolitics According To The Bible, and Business for the Glory of God, which we just happen to have in the Acton Book Shop; he also served as a member of the Translation Oversight Committee for the English Standard Version of the Bible, and also as General Editor of the ESV Study Bible. Barry Asmus is a Senior Economist with the National Center for Policy Analysis, which promotes private sector, market-based solutions to problems. He has been speaking, writing and consulting on any number of political and business issues for over 25 years.

Grudem and Asmus jointly authored a book with a title that nods to Adam Smith’s classic The Wealth of Nations, which inquired into what factors led certain nations to prosper; The Poverty Of Nations looks at the flip side of that question: what causes some nations to remain mired in poverty, and what might they do to change their circumstance?

We’re pleased to share with you the video of their joint presentation today; after the jump, I’ve included the episode of Radio Free Acton that features an interview with the two gentlemen.


amazon-workersLiberal and conservative, right and left, red state and blue state—there are dozens, if not hundreds of ways to divide political and economic lines. But one of the most helpful ways of understanding such differences is recognizing the divide between advocates of proximate justice and absolute justice.

Several years ago Steven Garber wrote an essay in which he explained the concept of “proximate justice”:

Proximate justice realizes that something is better than nothing. It allows us to make peace with some justice, some mercy, all the while realizing that it will only be in the new heaven and new earth that we find all our longings finally fulfilled, that we will see all of God’s demands finally met. It is only then and there we will see all of the conditions for human flourishing finally in place, socially, economically, and politically.

On the opposite end of the spectrum from proximate justice is absolute justice, the idea that we should never settle for “some” justice but must always seek, as a matter of duty, the maximal amount of justice.

The primary appeal of absolute justice is its purity. Why align with compromisers and those who are satisfied with “good enough” when you can fight for full justice? Being satisfied with proximate justice sounds more like an excuse to do less rather than a principled position.

The primary appeal of proximate justice is its realism. Since absolute justice is not attainable this side of the new heaven and new earth, settling for less is the best we can ever expect. When absolute justice is our standard we can even end up allowing injustice to continue and flourish.

Those in the absolute justice camp accuse the other side of being cynical, insensitive, and willing to compromise with evil, while advocates of proximate justice claim their ideological rivals are utopian, self-centered, and likely to do as much harm as good.

A more thorough examination of each side will have to wait for another day and another article. (As you can probably tell, though, I’m firmly on the side of proximate justice.) I only mention the two views because I want to show how the idea of proximate and absolute justice relates to employment and can help us understand the recent kerfuffle over the working conditions at Amazon.

trade21Many conservatives exhibit a peculiar tendency to be pro-liberty when it comes to business, trade, and wages, but protectionist when it comes to the economic effects of immigration.

It’s an odd disconnect, and yet, as we’ve begun to see with figures like Donald Trump and Rick Santorum, one side is bound to eventually give way. They’ll gush about the glories of competition, but the second immigration gets brought up, they seem to defer to labor-union talking points from ages past.

When pressed on this in a recent podcast, immigration protectionist Mark Krikorian argued that the difference is that immigrants are people not products, and thus they make things a bit more problematic. It’s more complicated and disruptive, he argues, when you’re dealing with actual people who have diverse and ever-shifting dreams. (more…)

amazon-workIn the movie Annie Hall, Alvy Singer (Woody Allen) tells an old joke about two elderly women having dinner at a Catskill mountain resort. One of them says, “Boy, the food at this place is really terrible.” The other one says, “Yeah, I know; and such small portions.”

Alvy says that’s essentially how he feels about life: it’s full of loneliness, and misery, and suffering, and unhappiness, and it’s all over much too quickly. Many people seem to have a similar complaint after reading the recent New York Times exposé about The company is a terrible place to work, and it’s almost impossible to get or keep a job there.

The article certainly makes Amazon sound like a brutal place to work. As one former employee says, “Amazon is where overachievers go to feel bad about themselves.” In the third paragraph the Times claims,

At Amazon, workers are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are “unreasonably high.” The internal phone directory instructs colleagues on how to send secret feedback to one another’s bosses. Employees say it is frequently used to sabotage others.

Many people will read that and be horrified while others will shrug and say, “Sounds a lot like the company I work for.” There are also those who question the accuracy and fairness of the article (Jeff Bezos, the CEO of Amazon, also owns the Washington Post, a primary competitor of the New York Times). One current employee even explains in detail what the story gets wrong.

I don’t want to bash or defend Amazon. But I do think it is worth asking why, if the company is so horrible, are people beating down Amazon’s door to work there?

Okay, maybe this needs a license...

Okay, maybe this needs a license…

EMTs have incredibly difficult and stressful jobs. They may go long stretches with little to do, and then be suddenly very busy, very fast. They need to know how to calm down a child with a broken arm, treat a woman pinned in a truck in a massive interstate pileup during a snowstorm, and deal with a potential elderly stroke victim. They are like an ER on wheels. In rural communities, they are a lifeline between people in their communities and the hospital that may be hours away.

Now, I don’t want to belittle interior designers. I imagine it can be stressful dealing with clients who keep changing their minds, keeping under budget on big jobs and knowing the difference between toile, sateen and silk when choosing curtains. But interior designers aren’t typically involved in saving lives. (Unless it’s something like, “Thank goodness! You got my wife’s chaise lounge reupholstered before her birthday party – you’re a lifesaver!”)

So, why is it easier to become an EMT than an interior designer? That’s the question posed by Jared Meyer and Savannah Saunders. It seems that the state of Florida is blaming interior designers for 88,000 deaths per year. They need oversight. They need regulation. They need big government. (more…)