Category: Economics

In the hubbub surrounding Brexit, many conservatives have cheered the United Kingdom’s vote to leave the European Union, hailing it as a win for freedom, democracy, and local sovereignty.

Yet for those who disagree, support for Brexit is painted as necessarily driven by fear, xenophobia, and protectionism. Although fear of immigrants and narrow nationalism have surely played their part, such sentiments and attitudes aren’t the only drivers at play, and they mustn’t be heeded if Brexit is actually going to succeed.

Indeed, for conservatives in the vein of Edmund Burke, the reasons for supporting Brexit are necessarily different. Political withdrawal from the EU needn’t, nay, mustn’t mean isolation from outside markets or a freeze on the movement of labor.

As Hannan outlines in a marvelous speech given prior to the vote, this isn’t about protectionism, but about preserving a tradition of freedom and democracy. It isn’t about a fear of outsiders, but about a basic belief in the principle of subsidiarity.

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Photography by Larry D. Moore

Today marks the 20th birthday of the Nintendo 64 (N64) gaming console. Don Reisinger offered a great tribute at Fortune:

On this day in Japan 20 years ago, Nintendo introduced the gaming system, among the first consoles to create realistic-looking 3D worlds filled with monsters, soldiers, and blood. It’s standard game design today, but at that point, it was new and exciting.

Before the Nintendo 64’s launch, gamers were largely forced into games with pixelated graphics and basic gameplay that required scrolling around a screen and solving basic puzzles. The Nintendo 64, which notched more than 30 million units sold over its lifetime, was a sign of bigger and better things to come.

Yet he notes that it wasn’t the most successful console at the time:

If sales are the sole guide of success, the Nintendo 64 was a middling performer. The nearly 33 million units it sold is notably lower than the 62 million Nintendo Entertainment Systems sold and the 49 million Super Nintendo Entertainment Systems the company sold.

While the Nintendo 64’s sales were more than the Sega Saturn, which could only muster 9 million unit sales over its lifetime, Sony sold 102.5 million PlayStation units while competing with the Nintendo 64.

There are a lot of things that Nintendo tried with the N64 that didn’t really work in their favor. But Nintendo’s willingness to take such risks, and their general product differentiation (for example, their massively successful Pokémon series debuted just one year earlier for Nintendo’s Game Boy handheld console, spawning a cartoon and a card game) make it an outstanding example in the long run … not only economically, but (metaphorically) spiritually as well. (more…)

necessary-sufficientTo be a champion of free markets is to be misunderstood. This is doubly true for free market advocates who are Christian. It’s an unfortunate reality that many of us have simply come to accept as inevitable.

That doesn’t mean, however, that we don’t attempt to clear up misunderstandings when we can. So let me attempt to clear up one of the most notorious misunderstandings: Few advocates of free markets (and none who are Christian) believe that free markets are a sufficient condition for human flourishing. We believe they are a necessary condition, but they alone are not sufficient.

Economist Donald J. Boudreaux (who, for what it’s worth, is not a Christian) explains:
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image1We live, work, and consume within an increasingly grand, globalized economy. Yet standing amidst its many fruits and blessings, we move about our lives giving little thought to why we’re working, who we’re serving, and how exactly our needs are being met. Adam Smith’s “invisible hand” feels more invisible than ever.

In response to our newfound economic order, big and blurry as it is, many have aimed to pave paths toward more “communitarian” ends, epitomized by recent waves of “localist consumerism,” “artisanal shops,” and “social entrepreneurship.” Such efforts can be tremendously fruitful, and insofar as they meet real human needs, we should heed their resistance to blind marches toward “progress.”

I only wish that such movements would appreciate the broader range of possible solutions. The slow and local is all well and good, but something as mundane and mainstream as a local McDonald’s can serve community needs just as well as the trendy mom-and-pops of the future. The big and global is not necessarily the enemy of the small and local.

As Chris Arnade demonstrates through a series of stories, for many low- and middle-income areas, “McDonald’s have become de-facto community centers and reflections of the surrounding neighborhood,” offering a hub for the very sort of social fabric-weaving that crunchy communitarians crave. (Note: I was an employee and then shift manager of a McDonald’s during my teenage years.)

One can be resistant to the nutritional risks of the food — just as I remain resistant to the budgetary risks of overpriced “artisanal donuts” — and still perceive the value that such enterprises bring to local communities everywhere: economic, social, and (dare I say) spiritual. (more…)

statusIn a recent comment about neo-reaction (forget about that for now, this isn’t about neo-reaction), economist Arnold Kling says “a major role of political ideology is to attempt to adjust the relative status of various groups.” One outcome of this is that,

… every adherent to an ideology seeks to elevate the status of those who share that ideology and to downgrade the status of those with different ideologies. That is why it matters that journalists and academics are overwhelmingly on the left. This means that the institutions of the mass media and higher education are inevitably and relentlessly going to seek to lower the status of conservatives.

This is an astute observation that seems rather obvious when you think about it, for we all have certain groups whose status we want raised. (As Kling says, “I would like to elevate the status of people who work in the for-profit sector and reduce the status of people who work in the non-profit sector.”) What is interesting is that we rarely consider this question openly and honestly.

Whose status do I want to see raised? If I were being perfectly candid I’d probably say my own (as most of use would). But if I were allowed a more idealistic answer I’d say that, as a Christian and in the context of my work for Acton, I want to raise the status of three groups: the poor, the vulnerable, and consumers.
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sintaxcan-300x189Philadelphia may like to think of itself as the “city of brotherly love,” but its latest tax increase is not so friendly to the poor.

Last week the city council passed a regressive soda tax proposal that will levy 1.5 cents per liquid ounce on distributors. According to Quartz, the tax will apply to regular and diet sodas, as well as other drinks with added sugar, such as Gatorade, lemonades, and iced teas.

This tax on sugary drinks is what is often called a “sin tax.” This is an excise tax that is specifically intended to target certain goods deemed harmful to society but that we don’t want (or can’t) ban completely, such as tobacco or alcohol. The idea is that by adding or increasing the tax, it increases the overall price of the good, thereby lowering consumer demand.

Sin taxes are a form of sumptuary law, a law that attempts to regulate permitted consumption of particular goods and services. Throughout history sumptuary laws have been used to reinforce social hierarchies or class-based discrimination. Normally this would be done by prohibiting certain social classes from being able to purchase a good, like the 16th-century French law that banned anyone but princes from wearing velvet. But modern sin taxes try to express the same types of social disapproval in more subtle ways.
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childlaborImagine you are given three choices — A, B, or C. In the ranking, A is much preferred to B and B is exceedingly preferable to C. Which do you choose? Obviously, all else being equal, you’d choose A.

Now let’s add the following restrictions to your choice:

• You, your family, and your friends will all get A. But you must make the choice of A, B, or C, for other people who you will likely never meet.

• If you choose A, no one gets B and some (perhaps many) other people will be stuck with choice C.

• If you choose B, few people will get A but even fewer will get stuck with C.

Which do you choose now?

Before you know what the choices entail, you’d likely select B as the least bad option for the people you are choosing for. It’s not as good as the choice you yourself got but it’s still better than C.

But what if I told you A is a ban on child labor in Bangladesh and B is allowing children to work in a garment factory earning 53 cents per day. Does that change your decision?
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