Category: Economics

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.

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.

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?

There’s been a lot of discussion leading up to the planned Pan-Orthodox Council in Crete this month. As is typical of councils in the history of the Church, so far it’s a mess, and it hasn’t even happened yet.

In what has been described as an act of self-marginalization by Bulgarian Orthodox scholar Smilen Markov, it looks like the Bulgarian Patriarchate has already backed out.

Antioch has a laundry list of grievances.

The OCA, which might not even technically be invited in the first place, has issued a statement.

And further statements from the Ecumenical Patriarchate, the Georgian Patriarchate, and others can be found.

No need to review the contents as the point is simply to note that, once again, the council is already a mess.

Officially, I should be calling it the “Great and Holy” council, but I’m not holding my breath on that one. That’s not out of cynicism (well, not entirely) but due to the record of history and the science of economics. (more…)

johnoliverHave you ever watched HBO’s Last Week Tonight? It’s a show where British comedian John Oliver reads a teleprompter explaining to Americans what is wrong with our country. It’s also a show where smug, self-satisfied progressives who miss John Stewart can be entertained while thinking they are watching “smart” content.

In reality, Last Week Tonight is frequently one of the dumbest shows on cable (in the sense that watching it makes you less informed about the world). And yet it is almost inescapable if you have an internet connection. Even if you don’t subscribe to HBO you’ll find clips every Monday morning on left-leaning media sites, or someone who wants to feel self-righteous and pseudo-intelligent will slip it into your social media channels.

A prime example is the most recent episode where Oliver takes on the debt collection industry. A representative headline reporting on the show (from a site that should know better) is “Watch: John Oliver just topped Oprah with one of the largest giveaways ever on TV.”

Oliver didn’t top Oprah nor was he involved in one of the largest giveaways ever on TV. The actual amount of money that Oliver gave away wasn’t that significant — $60,000 — but he was able to fool people who don’t know much about economics into thinking he actually gave away $15 million.

I’m not kidding. There are a lot of people this morning who really think a third-tier cable talk show host gave away $15,000,000.

Do no harmAll Christian ethics can be summed up in one command: “Love your neighbor as yourself” (Matthew 22:39). And within that command is the provision, as the Apostle Paul said, “Love does no harm to a neighbor” (Romans 13:10). This is why the Christian approach to public policy should begin with a simple standard: Because we love our neighbors, we should not support policies that we suspect will cause them harm.

Unfortunately, while the rule is simple to state it can be difficult to apply. We don’t always know or agree on what policies will cause harm. Still, any type of policy that is presumed or known to cause harm should be carefully scrutinized. A prime example is government regulations.

As economist Scott Sumner says, “One of the most basic ideas in economics is that the vast majority of regulations are harmful.”* He gives the example of a regulation on banks than forbids them from charging fees for the use of ATMs. This regulation appears to be “pro-consumer,” but as Sumner explains, the actual effect is likely to harm bank customers: