Category: Economic Freedom

Growing up, I attended a private, Christian school until 4th grade, when my mother couldn’t afford it any more and my brothers and I switched to a blue collar, suburban public school. Academically, I experienced a clear difference. The worst contrast was in math, where I learned basically nothing for three years. The only subject that was probably better at the public school was science, but I’m not even certain about that. Class sizes were larger too.

None of this is to say that I didn’t have good teachers and experiences and learn a great many things at my public school. I did, and I’m quite thankful for it, in fact. And, of course, private schools are perfectly capable of employing bad teachers and failing to properly educate their students. But this was my experience.

So in high school, for purely anecdotal and self-interested reasons, I supported school vouchers, much to the chagrin of many of my teachers. (There was a state level proposal in the 2000 Michigan election in support of vouchers that I wore a button supporting — I wasn’t old enough to vote at the time. Incidentally, the proposal failed.) After all, I thought, I might not have become such a slacker if I had continued to be challenged in my public school like I was in my private school.

With the recent appointment of Betsy DeVos as Secretary of Education by president-elect Donald Trump, vouchers may become a national issue. She has championed the cause and supported politicians who do for years.

Able now to take a less self-interested look at the issue (or so I tell myself), I’m actually a bit confused by the politics of vouchers — why isn’t there more skepticism on the right and support on the left? (more…)

The Dodd-Frank Act became law in 2010, adding more regulation to a banking industry that was already heavily regulated.  The main purpose of this 2,300 page act was to give consumers protection against big profit seeking banks but the unintended consequences prove to be much greater.  The regulation was supposed to help the little guy but as Acton Director of Research Samuel Gregg writes at The Stream, it actually hurts the little guy.

President-elect Donald Trump claims that he wants to deregulate the financial industry but in order for this to happen successfully, we need to understand the argument for why such actions would be beneficial.  Gregg says this:

Consider, for instance, the costs associated with meeting the ever-growing demands of regulatory compliance. Such costs are more easily borne by large banks than smaller-sized institutions such as community banks. The result is that excessive regulation makes it harder for smaller banks to compete. That often puts access to capital out of reach for many people.

But perhaps the most harm which excessive financial regulation inflicts upon ordinary people concerns the ways in which such regulations can — and have — contributed to financial meltdowns. Such crises are far more likely to hurt those on the lower-side of the economic scale than the already-wealthy.

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In a new article at The Stream, Acton Director of Research Samuel Gregg offers good reasons why a move toward economic nationalism is not in the best interest of America.  He starts with this:

Whatever the motivations for such policies, their costs vastly outweigh their benefits. In the first place, protectionism discourages American businesses and workers from focusing on producing those goods and services where they enjoy a comparative advantage vis-à-vis other nations. Not only does this undermine productivity, efficiency, and international competitiveness of American businesses. It also encourages American workers to enter industries that, no matter how much protection they enjoy, won’t be able to compete in the long term.

Gregg continues to give reasons against economic nationalist policies throughout his article, but one reason that seems to be quite relevant at the time is crony capitalism.  Gregg says this:

Yet another problem with economic nationalism is that it encourages a growing problem in American economic life: crony capitalism.

Giving certain American businesses subsidies or lumbering foreign products with tariffs may seem like economic questions, but in practice they are ultimately political. Such policies encourage companies prefer to seek profits by lobbying legislators and bureaucrats rather than serving customers and creating value.

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thanksgiving-assortmentFamilies across the country are about to celebrate Thanksgiving, expressing gratitude for God’s overwhelming grace and abundance. And yet even as we offer thanks to God for his provision — materially, socially, spiritually, or otherwise — how often do we pause and reflect on the freedoms and channels that God uses in the process?

Will we remember that the very foods we are sure to enjoy on Thanksgiving Day required a great deal of investment, cultivation, and risk-taking? Will we reflect with gratitude on the labor it took to grow and harvest, package and ship, market and sell these items? It’s but one small window into the innumerable hands working together each and every day in service of the common good.

And will we recognize that this mysterious, creative activity is not only due to human hands, but that such dominion and stewardship mirrors that of a Creator God who so loved that he gave?

Whether we talk about this phenomenon in terms of an “invisible hand” (Adam Smith), “spontaneous order” (Hayek) “the magic of the marketplace” (Reagan), or a “great and mysterious collaboration” (Grabill), we’d do well to remember that even as we pour gratitude and honor out to our neighbors, we should be careful that we orient things before and beyond the work of human hands. “The price system is indeed an amazing creation, but of the divine mind,” ” writes Joe Carter. “It’s one of God’s means of coordinating human activity for the purposes of human flourishing.”

At Carpe Diem, Mark Perry dusts of a Jeff Jacoby column that beautifully explains this very point, and does so in the particular context of Thanksgiving. “Isn’t there something wondrous — something almost inexplicable — in the way your Thanksgiving weekend is made possible by the skill and labor of vast numbers of total strangers?” Jacoby writes. (more…)

“The mundane progress driven by ordinary economic and social processes in a free society becomes dramatic only when its track record is viewed in retrospect over a span of years.” –Thomas Sowell

In a recent edition of Uncommon Knowledge, economist Thomas Sowell discusses his latest book, Wealth, Poverty, and Politics, which provides a comprehensive argument for the origins of prosperity.

“There’s no explanation needed for poverty. The species began in poverty,” Sowell says. “So what you really need to know is what are the things that enable some countries, and some groups within countries, to be prosperous.”

Revisiting many of the same themes and economic arguments found in his other works, Sowell adds a wider historical exploration of culture, geography, and politics, connecting the dots between each and critiquing competing social analyses along the way (e.g. Keynes, Piketty, etc.). (more…)

In a recent article for The Telegraph, Sir Roger Scruton discusses the importance of national borders in Europe and the threat that the EU poses to them.  He explains how religion once united Europe but since religion began to fade in the 17th century, territory took over as the principle that Europeans turn to in order to find unity.  Scruton says this:

European civilisation has been steadily replacing religion with territory as the source of political unity. The process began in the 17th century, as the call for popular sovereignty and national unity began to be heard above the noise of religious conflict.  Following the French Revolution and Napoleon’s failed attempt at a pan-European Empire, Europe emerged as a collection of nation states.

Scruton goes on to talk about how national identity contributed to the outcome of the Second World War: (more…)

EdmundBurkeAdvocates of economic freedom have a peculiar habit of only promoting the merits of the free markets as they relate to innovation, poverty alleviation, and economic transformation. In response, critics are quick to lament a range of “disruptive” side effects, whether on local communities or human well-being.

Alas, in over-elevating the fruits of material welfare, we forget that such freedom is just as important as a restraint against the social dangers of an intrusive state as it is an accelerant to economic progress. If our concern is not just for economic prosperity, but for the wider flourishing of individuals and communities – social, spiritual, and otherwise – economic freedom has a role to play there, too.

As I’ve noted before, Edmund Burke builds the best bridge on this topic, offering a robust vision of liberty that connects these dots accordingly. In a new essay on Burke’s “economics of flourishing,” Yuval Levin highlights those very views, noting that, although his economic solutions were similar to those of his friend and contemporary, Adam Smith, Burke’s conclusions were more closely tied to a deeper commitment to human flourishing.

This begins with Burke’s view of liberty, which rejected any notion of radical individualism or choice as a good unto itself. As Levin explains, Burke “was moved to articulate his vision of human liberty precisely in opposition to a highly individualist, choice-centered understanding of what freedom entails and enables.” Or, as Burke himself puts it, true liberty “is not solitary, unconnected, individual, selfish liberty, as if every man was to regulate the whole of his conduct by his own will” but “social freedom” – “another name for justice; ascertained by wise laws, and secured by well-constructed institutions.” (more…)