Category: Economic Freedom

davebratLast night, economics professor David Brat surprised everyone in defeating House Majority Leader Eric Cantor (R., Va.) in a primary challenge for Virginia’s 7th congressional district. Predictably, the media is now a-buzz about Brat, rapidly catching up on his beliefs, his plans, and so on.

Time will tell as for whether Brat is successful as a politician, and whether he is, in fact, a strong conservative alternative to his predecessor. But one item that sticks out in Brat’s academic CV is his unique interest in the intersection of economics and theology.

Currently an economics professor at Randolph-Macon College in Ashland, Va., Brat holds a B.A. in Business Administration from Hope College in Michigan, a Master’s degree in Divinity from Princeton Theological Seminary, and a Ph.D in economics from American University. I’m sure there are plenty of places to explore his thoughts on these matters, but one place of particular interest is an essay he wrote titled, “God and Advanced Mammon: Can Theological Types Handle Usury and Capitalism?”

Although the essay aims specifically at the issue of usury, in his analysis of the topic, we begin to see the deeper theology and philosophy that steers Brat’s political and economic thought.

Given the length of the essay, the following excerpts are offered simply as a taste of where he’s coming from. Emphasis is added wherever text is bolded.

Regardless of how and whether Brat actually succeeds in governing, his profound interest in the intersection of economics and theology is a feature we should hope to see more of in the political arena.

Brat on capitalism:

Capitalism is the major organizing force in modern life, whether we like it or not. It is here to stay. If the sociologists ever grasp this basic fact, their enterprise will be much more fruitful…Capitalist markets and their expansion in China and India have provided more for the common good, more “social welfare,” than any other policy in the past ten years. In fact, you can add up all of the welfare gains from public policy in the United States and abroad, and they will not approach the level of human gains just described. Incomes in China and India have risen from $500 a year per person to over $5,000 a year per person over the past twenty years or so. This is due to market capitalism. Over two billion people now have food to eat and some minimal goods to go along. (more…)

AnthazShopIndiaFreedom to practice one’s faith and be a person of faith can be instrumental in enabling the poor to achieve some modicum of social and economic freedom, says Rebecca Shah:

Religion is no panacea, but aspects of religion can activate certain practices and partnerships among its adherents that can motivate and encourage economic development. If modern economics continues to yield an understanding of human development that ignores the role of religion, governments and development institutions will persist in acting as “one-eyed giants” who “analyze, prescribe, and act as if man could live by bread alone, as if human destiny could be stripped to its material dimensions alone” (“Development Experts: The One-Eyed Giants” in World Development). According to human development theorist Denis Goulet, development is more human and fuller when people are called to “be more” rather than simply to “have more.” There can be “authentic development” only when there is a “societal openness to the deepest levels of mystery and transcendence,” and when this yearning for mystery and transcendence is recognized and satisfied.

Read more . . .

pope and cross

Pope Francis

Much has been said about Pope Francis’ views on economics (in fact, you can read Acton’s Special Feature on this here.) In The Wall Street Journal, Cardinal Timothy Dolan of New York, discusses how the media has skewed Francis’ remarks as endorsing redistribution and denouncing capitalism. Cardinal Dolan says this is unfortunate, given what the pope has actually said. While the pope is clear that we must be generous in all our social activity, he is not denouncing capitalism.

The church believes that prosperity and earthly blessings can be a good thing, gifts from God for our well-being and the common good. It is part of human nature to work and produce, and everyone has the natural right to economic initiative and to enjoy the fruits of their labors. But abundance is for the benefit of all people.

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eat the richThe rich get richer and the rest of us…well, we struggle along. Shouldn’t those with more money be spreading it out a bit more? My coffers clink with spare change; I sure could use some of that money. It only seems fair, right?

Peter Morici, at Breitbart News, tackles the truth of income inequality. Those of us in the “rest of us” category are getting crushed by monopolies, unjust taxation, and political corruption. That, Morici says, is the truth of income inequality. It’s so bad that Vermont Senator Bernie Sanders (I) compared our situation to that of Russia, and a lot of folks nodded their heads in agreement.

Vermont Senator Bernie Sanders (I) recently asked Federal Reserve Chairwoman Janet Yellen “are we still a capitalist democracy or have we gone over into an oligarchic form of society in which incredible economic and political power now rests with the billionaire class?”

Russia’s oligarchy has two salient characteristics. The government uses its power to regulate markets to concentrate wealth in the hands of an influential few, while most of its citizens stay poor by western standards.

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Regulatory Climate IndexThe revitalization of cities has become a significant focus among today’s Christians, with many flocking to urban centers filled with lofty goals and aspirations for change and transformation.

Last summer, James K.A. Smith expressed concern that such efforts may be overly romanticizing certain features (community!) to the detriment of others (government), concluding that “farmer’s market’s won’t rescue the city” but “good government will.” Chris Horst and I followed up to this with yet another qualifier, arguing that while both gardens and good governance are indeed important, so is business and entrepreneurship.

Families, churches, institutions, businesses, and governments all need to be in right relationship if cities are to flourish, and this means that Christians need to gain a clear understanding of what these relationships look like. How do the economies of love, creative service, wisdom, wonder, and order interact and intersect, and how do we orient our actions and attitudes accordingly?

For example, if a city’s economic future is driven, among other things, by entrepreneurialismhigh levels of human capitalclustering of skilled workers and industries, or in the case of North Dakota’s Bakken region, bountiful natural resources, what role should the People of God play therein? What role do families play in those endeavors? What about churches, community associations, organizations, or businesses? How ought public policy to guide (or not guide) various efforts? Christians are called to be concerned with all of the above.

In a new study by the U.S. Chamber of Commerce Foundation — Regulatory Climate Index 2014: The Cost of Doing Business in America — we see a great example of the types of questions we ought to be asking. Focusing on 10 cities across America, the study investigates “the efficiency of local regulations that apply to small businesses,” demonstrating the full impact that the dirtier, more “boring” and mundane elements can have on whether and how individuals are empowered to invest, serve, and sacrifice within and for their cities. (The project was led by Michael Hendrix, who has contributed here on the blog in the past.) (more…)

Market in the Soviet Union, circa 1986

Market in the Soviet Union, circa 1986

We Americans like choices. Go to any large grocery store and stand in awe at the vast array of cereals: everything from regular old oatmeal to some sort of toasted rainbow sprinkles of joy. The market economy is built upon choice: not only does the consumer have a choice in what she wants, she can stay away from things she doesn’t want, like bad service or poorly prepared food. Yes, we like choices.

Obamacare is built on fewer choices, however. The New York Times tells us that we are facing fewer choices for our health care, fewer doctors and high costs if we wish to go outside of our prescribed network. Reed Abelson:

No matter what kind of health plan consumers choose, they will find fewer doctors and hospitals in their network — or pay much more for the privilege of going to any provider they want.These so-called narrow networks, featuring limited groups of providers, have made a big entrance on the newly created state insurance exchanges, where they are a common feature in many of the plans.

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800px-Hartmann_Maschinenhalle_1868_(01)In a marvelous speech on the origins of economic freedom (and its subsequent fruits), Deirdre McCloskey aptly crystallizes the deeper implications of her work on bourgeois virtues and bourgeois dignity.

For example, though many doubted that those in once-socialistic India would come to see markets favorably, eventually those attitudes changed, and with it came prosperity. As McCloskey explains:

The leading Bollywood films changed their heroes from the 1950s to the 1980s from bureaucrats to businesspeople, and their villains from factory owners to policemen, in parallel with a similar shift in the ratio of praise for market-tested improvement and supply in the editorial pages of The Times of India… Did the change from hatred to admiration of market-tested improvement and supply make possible the Singh Reforms after 1991? Without some change in ideology Singh would not in a democracy have been able to liberalize the Indian economy…

…After 1991 and Singh much of the culture didn’t change, and probably won’t change much in future. Economic growth does not need to make people European. Unlike the British, Indians in 2030 will probably still give offerings to Lakshmi and the  son of Gauri, as they did in 1947 and 1991. Unlike the Germans, they will still play cricket, rather well. So it’s not deep “culture.” It’s sociology, rhetoric, ethics, how people talk about each other. (more…)

Zenit, the Catholic news service, published a recap of Acton Institute’s conference, “Faith, State, and the Economy: Perspectives from East and West.” The event, held in Rome on April 29, brought expert speakers from around the world to explore the complex relationship between religious liberty and economic freedom. For more on this conference and others planned in the series titled “One and Indivisible? The Relationship Between Religious and Economic Freedom,” please visit this page.

Zenit asked Acton Research Director Samuel Gregg what Catholic social service organizations can do in order to not compromise their Catholic identity:

Gregg underlined the importance of De Caritate Ministranda, “On the Service of Charity” – a 2012 document Benedict wrote upon the recommendation of Cardinal Robert Sarah who heads the Pontifical Council Cor Unum, the Vatican’s main oversight agency for charitable activities.

The document, Gregg said, made it “very clear that if Catholic charitable organizations accept funding, whether it be private or government, and it starts to cause the organization to compromise its identity, mission, ability to employ who it wants to employ, its ability to do what it wants to do in accordance with Church teaching, then bishops have the responsibility to stop Catholic organizations from accepting [these funds].”

“It’s well worth reading,” Gregg said, as “it is forcing Catholic organizations to ask themselves some very hard questions, such as: ‘Who is our master?'”

Read more of “International Experts Examine Religious and Economic Freedoms” On Zenit.

On Tuesday, April 29, the Acton Institute hosted the conference Faith, State, and the Economy: perspectives from East and West at the Pontifical Gregorian University in Rome. This conference was the first in a five-part international conference series – One and Indivisible? The Relationship Between Religious and Economic Freedom.

The one-night event, moderated by Acton’s Rev. Robert A. Sirico, featured four prominent speakers who offered deeper insight into the question of the relationship between religious freedom and economic liberty. The speakers represented a diversity of global perspectives on the relationship between religious and economic freedom.2014-04-29_0226_REV

Rev. Prof. Martin Rhonheimer of the Pontifical University of the Holy Cross, located in Rome, presented on Christianity and the Limits of State Power. Rhonheimer discussed the important and inherent link between limited government and a flourishing free market, the historical roots of the free market in Christian civilization, and the danger of Christians who fail to understand the link between Christianity and a free market economy.

Following Rhonheimer, Archbishop Maroun Elias Lahham of the Latin Patriarchate of Jerusalem for Jordan offered his perspectives on Christians and the Challenge of Freedom in the Middle East. Samuel Gregg, the Director of Research at the Acton Institute, followed with an engaging analysis on contemporary issues in his presentation Religious Liberty and Economic Freedom: Intellectual and Practical Paradoxes. Gregg revealed some of the ways that greater economic freedom may lead to greater religious liberty, using the Chinese situation as a case study.

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Not the Chinese government, which should come as no shock.  But what about the United States?  As this Weekly Standard blog post points out, two prominent Hong Kong democracy advocates recently visited Washington in an attempt to secure American support for political reform there, but to little avail.

The people of Hong Kong have long enjoyed economic freedom, often ranking at the top of the Heritage Foundation’s Index of Economic Freedom.  Since moving from British to Chinese rule in 1997, Hong Kong has maintained much of its economic freedom, but is now under pressure to choose from among “Beijing-approved” candidates.  Hmm.  Makes one wonder about the status of religious freedom there as well.

Who better to ask than Cardinal Joseph Zen Ze-kuin, bishop emeritus of Hong Kong, outspoken advocate for religious freedom in mainland China, and one of the speakers at an upcoming Acton conference  “Faith, State, and the Economy: Perspectives From East and West”?

The conference will take place on April 29 in Rome and is the first in a series called “One and Indivisible? The Relationship between Religious and Economic Freedom.” For more information visit the conference series webpage.