Category: Economics

Blog author: jcarter
Thursday, September 18, 2014
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bible-studyMost Christians recognize that the Bible has lot to say about economic topics, such as money and poverty. Yet there is a paradoxical assumption, whether stated or unspoken, that these passages don’t speak to larger economic issues. Occasionally this is true, but more often than not, we can find principles from Scripture that can help us discern how we should think about matters related to economics.

Consider, for example, the issue of economic systems. The Bible doesn’t claim to favor any particular nation-based economic system, such as American-style capitalism or the old Soviet-style communism. But Scripture does seem to have a clear preference for the economic activities that underpin the free market. As David Kotter explains,
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poverty_20130311One of the most underreported stories of the last decade is about good news: we’re winning the struggle against chronic hunger around the globe.

A new U.N. report estimates that the number of chronically undernourished people in the world has decreased by more than 100 million over the last decade, and 209 million lower than in 1990–92. Those figures are even more remarkable when we consider the global population has increased by almost 2 billion since 1990.

According to the report, since 1990-92, 63 countries have reached the hunger target of halving the proportion of undernourished people and 25 countries have achieved the goal of halving the number of undernourished people. Of the 63 developing countries, 11 already had undernourishment levels below 5 percent (the methodological limit that can assure significance of the results different from zero) in 1990-1992 and have been able to keep it in that interval, and are therefore not the prime focus of the 2014 report.

In the same period, the prevalence of undernourishment has fallen from 18.7 to 11.3 percent globally and from 23.4 to 13.5 percent for developing countries. There has likely never been a time in modern human history when such a large percentage of the population has been freed from chronic hunger.

Unfortunately, about 805 million people — mostly in Africa and South-Eastern Asia still remain without adequate food resources, due largely to conflicts and natural disasters. But we’re making remarkable progress. In fact, as Steve Davies of LearnLiberty explains, in the near future we may be able to eradicate extreme poverty and global hunger altogether.

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Vatican Radio reports that the Organization for Cooperation and Economic Development is adjusting its economic forecast for major developed economies downward, with growth in the Eurozone projected to be only 0.8% in the coming year. Along with this forecast, the OCED is encouraging the European Central Bank to engage in a program of stimulus to offset the negative effects of such weak levels of growth.

For analysis on this story, Vatican Radio turned to Kishore Jayabalan, Director of Istituto Acton in Rome, who explained that adjusting monetary policy would only mask the fundamental problems that cause slow growth in European markets, such as high taxes, burdensome regulatory schemes, and strict employment rules that make it difficult for employers to have any flexibility in hiring and firing.

You can listen to the full report and interview using the audio player below.

In the United States, we’ve only begun to see how impediments to religious liberty can harm and hinder certain businesses and entrepreneurial efforts. Elsewhere, however, particularly in the developing world, religious restrictions and hostilities have long been a barrier to economic growth.

To identify these realities, Brian Grim of Georgetown University and Greg Clark and Robert Edward Snyder of Brigham Young University conducted an extensive study, “Is Religious Freedom Good for Business?,” which concludes that “religious freedom contributes to better economic and business outcomes.”

Katrina Lantos Swett and Daniel Mark summarize the key findings at Investor’s Business Daily:

Reviewing the GDP growth of 173 countries while controlling for 23 financial, social and regulatory factors, [Clark and Snyder] found that religious freedom not only is associated with global economic growth, but also is one of only three factors carrying that association.

As the study found, 20% of countries with low levels of religious hostilities and 20% nations with low levels of government restrictions on religion were economic innovators, while the figures for nations with high levels of hostilities and restrictions were only 8% and 7%, respectively.

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Blog author: dpahman
Wednesday, September 10, 2014
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I have spoken in the past in favor of net neutrality, writing,

Whoever is responsible for and best at enforcing it, net neutrality had this going for it: it was a relatively stable, relatively open playing-field for competition…. [T]he fact that companies tried to get around it via copyright protection privileges shows that it was, in fact, doing something to enforce freedom of competition. Now, without it, there is an opportunity for concentration of power…. As [Walter] Eucken illustrated, concentration can lead to instability, and instability leads to popular calls for state regulation, which tend in practice toward cronyism. Certainly, such a trajectory is not inevitable, but it is now more likely, giving good reason for pause at the idea that we do not need net neutrality — or something like it — in the future.

This week, House minority leader Nancy Pelosi voiced her support for net neutrality as well. So why would I object? Because the measures that Pelosi proposes give much more power to the government, following the trajectory outlined above in the direction of over-regulation. (more…)

long-spoons“How can we explain this emporiophobia—a fear of markets—given the overwhelming evidence that such institutions provide the greatest wealth, health and happiness for humankind?” When economics professor Paul Rubin asked that question last December he answered by saying that we need to shift the metaphor of markets from “competition” to “cooperation.”

Cooperation isn’t just more important in the economic sphere—it’s also more common. We cooperate with everyone involved in making all the products we buy and sell, millions of people we’ll never know.

[...]
This discussion may seem semantic, but words have meaning and power. People would feel much more favorably toward a “cooperative economy” than a “competitive economy.”

To emphasize the cooperative aspects of the market in order to provide a more accurate perspective requires that we apply new metaphors and symbols when explaining how markets work. A story I believe can be especially helpful is the “parable of the long spoons.” Caritas Internationalis created a video about the allegory that brilliantly emphasizes the utility of cooperation.
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Today at Ethika Politika, I caution against the sort of scapegoating that justifies ideologies at the expense of human effort:

Do you support capitalism? Socialism? Distributism? Something else? Wonderful. What does that look like among the mess of market forms that actually constitute the economy you participate in every day? Rather than criticizing those policies that fall short of your saintly ideal or align too closely with your Hitler, what ones constitute a first step in the right direction for you? And why? And what are the actual consequences, intended or otherwise, that may come about?

While there is a place for simply outlining one’s ideal, if we wish to actually do some good ourselves, we need to get our hands dirty in the mire of material reality. Gnostic scorn for the concrete and this-worldly boasts a broad road with a wide gate, but it is the narrow road of reality that leads to life; not only for ourselves, but for the common good; not just for this world, but for the kingdom of God.

In his recent book Get Your Hands Dirty: Essays on Christian Social Thought (and Action), Jordan Ballor begins with a similar call: (more…)

French economist Thomas Piketty

This summer’s issue of The City, which includes an article by myself on Orthodoxy and ordered liberty, opens with a symposium of five articles on “The Question of Inequality.” These include two articles on Pope Francis, two on French economist Thomas Piketty’s recent book Capital in the Twenty-First Century, and one on the Bible.

Having recently written a two part article on the subject for the Library of Law & Liberty (here and here), I took copious notes as the topic is an ongoing subject of research.

In order to recommend the symposium to our readers here, who no doubt have interest in the topic, I compiled the following highlights:

Josiah Neeley, “What Does Bono Know That the Pope Doesn’t?”

Argentina is now the world’s only “formerly developed” country.

[E]ven in the United States a great deal of inequality is the result not of the heroic innovator but of government favoritism.

Donald Devine, “Does Pope Francis Hate Capitalism?”

[B]y 1910 … Argentina’s per capita Gross Domestic Product [was] number ten in the world.

Peron’s Argentina [in the mid-twentieth century] was perhaps the first comprehensive welfare state…. [And] the result has been a much poorer country.

The actual experience of markets [contra Pope Francis] is hardly autonomy. The U.S., one of the freer countries, has 300,000 regulations.

[B]etween 2005 and 2010 the total number of poor in the world actually fell by half a billion people as trickle down prosperity lifted millions from absolute destitution.

Today’s reality is the over-regulatory welfare state, not wild markets. (more…)

Blog author: jcarter
Thursday, September 4, 2014
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Imagine if a scientist was able to create technology that turns corn into cars. As economist Bryan Caplan explains, we already have such an innovation: foreign trade.

Caplan argues that foreign trade is a form of technology that lowers our cost of living and increases our standard of living. In fact, claims Caplan, from a broader perspective trade is even better than most technology since it not only makes us better off, it makes foreigners better off too.

Blog author: dpahman
Wednesday, September 3, 2014
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City Summer 2014In the most recent issue of The City, I have an essay on Orthodoxy and ordered liberty. I argue that Orthodox theological anthropology, which distinguishes between the image and likeness of God and two forms of freedom corresponding to them, fits well with the classical understanding of ordered liberty.

In particular, I examine these freedoms with regards to the family, religious liberty, political liberty, and economic liberty, arguing that the Orthodox ascetic tradition has much to offer to modern Christian social thought with regards to how best to order the freedom we have by virtue of being created after the image of God toward that freedom from passion and sin that finds its fulfillment in the likeness of Jesus Christ.

Of interest to our readers here, with regards to economic liberty, I write,

We are created with a capacity for freedom, autexousio, to be used for the purpose of the moral freedom of theosis: eleutheria. Thus, just as we ought to offer up our bodies as living sacrifices to God (cf. Romans 12:1), so also we are to offer up God’s creation to him through our labor. God has given us the earth in order “to tend and keep it” in a paradis[ai]cal state (Genesis 2:15). Thus, acknowledging … our propensity for failure, we nevertheless have a duty to make of God’s creation what we can, imitating the creativity of God and exercising the dominion he gave us (Genesis 1:26).

We must, then, have liberty in society to freely cultivate the resources of the earth for the sake of the higher good of self-sacrificing love. Helen Rhee affirms in Loving the Poor, Saving the Rich, her study of wealth and poverty in the early Church, the consistent patristic teaching of both the affirmation of private property rights and our moral duties to use our property for the good of others (what is known in the West as the “universal destination of goods”)….

You can read the full article online here.

And while you’re at it, take the time to subscribe to The City. It’s free and published in print and online three times a year. Subscribe here.