Category: Economics

Blog author: KHanby
Tuesday, September 6, 2016
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Economic Growth in the U.S. has slowed down compared to historical averages according to recent reports from the Bureau of Economic Analysis.  Some are claiming that this is okay and that it is “normal” while there are others who disagree and understand that economic growth is essential to a prospering society.  This division among people on how they view economic growth also represents a division among the two major political parties on how they view economic growth.  Director of Research here at the Acton Institute, Samuel Gregg, recently penned an article for stream.org about the fundamental differences between the Democratic and Republican Party platforms on the topic of economic growth.

Gregg starts out by explaining the Dems position on economic growth and how they focus most of their economics on redistribution: (more…)

epipen_Approximately 1 in 50 Americans are at risk of anaphylaxis, a severe and potentially life-threatening allergic reaction caused by such conditions as food allergies or exposure to the venom of bee stings. Fortunately, people at risk of anaphylaxis can get a prescription for an epinephrine autoinjector that goes by the brand name EpiPen. By self-injecting epinephrine at the onset of anaphylaxis they can be stabilized long enough to seek medical treatment.

In 2007, the cost was approximately $100 (the medicine in the injector costs about $1). But earlier this month the company that produces EpiPens, Mylar, raised the price 400 percent to $600. After an outcry from the public, Mylar announced it would introduce a generic EpiPen for $300. Because the FDA requires pharmacist to put an expiration date on the EpiPen of 12 months after the time of purchase, a new one has to be bought every year so patients have to pay hundreds of dollars a year for medication they may never even use.

Why are EpiPens so expensive? Because Mylar has a government controlled monopoly that prevents anyone else from making similar products. And yet, ironically, many economically uninformed people are blaming the rapid price increase on the free market. For example, as Sarah Kliff of Vox writes,
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Blog author: jballor
Tuesday, August 30, 2016
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Harold BermanIn his magisterial Law and Revolution, Berman includes these incisive observations in his conclusion:

Law is as much a part of the mode of production of a society as farmland or machinery; the farmland or machinery is nothing unless it operates, and law is an integral part of its operation. Crops are not sown and harvested without duties and rights of work and exchange. Machinery is not produced, moved from the producer to the user, and used, and the costs and benefits of its use are not valued, without some kind of legal ordering of these activities. Such legal ordering is itself a form of capital.

Berman offers this in part as a corrective to Marxist reductionism of everything to a materialist substructure. Thus, writes Berman, “Law is not only fact; it is also idea, or concept, and, in addition, it is a measure of value. It has, inevitably, an intellectual and a moral dimension.”

In a new video from TED Ed, Akshita Agarwal provides a quick lesson on Adam Smith’s “paradox of value” and the differences between “value in use” and “value in exchange.”

For Christians, there’s a crucial lesson here about the best way to meet human needs in the economic order, whether through trade policy, reducing price controls, or any number of other areas. Discerning “economic value” is a tricky thing, and free economies are a handy tools for working through these things in peaceful and productive ways.

But as Agarwal concludes, it also has implications for our everyday stewardship: (more…)

pessimism2Global poverty is on the decline. Technological progress is pacing at break-neck speed. Freedom and opportunity are spreading across the world. And yet our political classes and popular masses continue to preach of impending doom.

Why do we have so much pessimism in an age of such pronounced prosperity?

In a splendid essay for The Spectator on the “doom delusion,” Johan Norberg argues that, on the whole, there is actually great cause for optimism. Writing in a vein similar to thinkers such as Matt Ridley and Deirdre McCloskey, Norberg reminds us that, according to a range of data about poverty alleviation, economic growth, scientific discovery, and population growth, the present looks great and the future looks even brighter. (more…)

Brooks-2x1500We continue to see the expansion of freedom and the economic prosperity around the world. And yet, despite having enjoyed such freedom and its fruits for centuries, the West is stuck in a crisis of moral imagination.

For all of its blessings, modernity has led many of us to pair our comfort and prosperity with a secular, naturalistic ethos, relishing in our own strength and designs and trusting in the power of reason to drive our ethics.

The result is a uniquely moralistic moral vacuum, a “liberal paradox,” as Gaylen Byker calls it — “a hunger for meaning and values in an age of freedom and plenty.”

In the past, American prosperity has been buoyed by the strength of its institutions: religious, civil, political, economic, and otherwise. But as writers such as Yuval Levin and Charles Murray have aptly outlined, the religious and institutional vibrancy that Alexis de Tocqueville once hailed appears to be dwindling, making the space between individual and state increasingly thin.

The revival and restoration of religious and civic life is essential if we hope to cultivate a free and virtuous society, occurring across spheres and sectors, from the family to business, from the church to political institutions.

Given the increasing attacks on religious liberty, Christian colleges and universities are standing particularly tall, even as they endure some of the highest heat. In a recent talk for the Council for Christian Colleges and Universities, David Brooks demonstrates the cultural importance of retaining that liberty, explaining how his recent experiences with Christian educational institutions have affirmed their role in weaving (or re-weaving) the fabric of American life. (Read his full remarks here.) (more…)

Photo courtesy of flickr

Photo courtesy of flickr

This past week, one of the rising political figures in the Democratic Party, Mayor Peter Buttigieg of South Bend, Indiana penned an op-ed for the South Bend Tribune arguing that raising the minimum wage is “the right thing to do.”

Mayor Buttigieg, cites three reasons why he believes raising the minimum-wage is the right thing to do: It’s good for business, good for the economy, and good for family.  All these “goods” assume that raising the minimum-wage does not reduce employment.

So what do basic economic principles say about raising the minimum wage? Take a look at this graph.

RMUqwRR (more…)