Category: Economics

wilhelm-ropkeWilhelm Röpke is one of the most important 20th century economists that almost no Americans know anything about. Fortunately, that may soon change as Röpke’s classic work on economics, A Humane Economyis being republished by ISI Books with an introduction by Samuel Gregg, director of research at the Acton Institute.

Intercollegiate Review has posted an excerpt from Gregg’s introduction:
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Cocoa-farmersThere’s a famous essay by Leonard Read titled “I, Pencil” in which an eloquent pencil (yes, pencil) writes in the first person about the complexity and collaboration involved in its own production.

“Here is an astounding fact,” the pencil proclaims. “Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me…Indeed, there are some among this vast multitude who never saw a pencil nor would they know how to use one. Their motivation is other than me.”

Trade makes unlikely friends — friends who, by creating, contributing, and trading, participate in powerful acts of service and gift-gifting, whether they know it or not. “Millions of human beings have had a hand in my creation,” the pencil writes, “no one of whom even knows more than a very few of the others.”

Written in 1958, Read’s essay has proven to be a helpful illustration of this reality. And now, in a new pair of videos from VPRO Metropolis, we find yet another.

In the first video, we witness cocoa growers and harvesters in the Ivory Coast, who, up until now, had never before seen, tasted, nor heard of chocolate, a primary output of their toil. They simply harvested the cocoa fruit and sold the beans to brokers. The rest was mystery. (more…)

Mincaye of the Waodani

Mincaye of the Waodani

As we continue to encounter the adverse effects of certain forms of foreign aid and other misaligned efforts to alleviate poverty, it becomes increasingly clear that those in need require a level of care, concern, and discipleship not well suited to detached top-down “solutions.”

But just as we ought to be careful about the types of solutions we create, we ought to give the same level of attentiveness to the needs themselves, which are no less complex and difficult to discern.

Steve Saint, author of End of the Spear and missionary to the Waodani people of Ecuador, offers some helpful insights and warnings along these lines, critiquing the West’s tendency to project its “standards, values and perception of need onto others,” particularly when it comes to material needs.

“When people visit the Waodani,” he explains, “they look around and think, ‘Wow, these people have nothing!’” Yet, when the Waodani encounter the lifestyles of foreign outsiders, they tend to find them unseemly and excessive. (more…)

gleaners-milletIn recent years, we’ve seen a renewed focus on the deeper value, meaning, and significance of our daily work, particularly across the realm of evangelicalism. Yet as easy as it may be for some to alter old attitudes and begin appreciating the gift of creative service, it can be extremely difficult for others — and often for good reason.

Indeed, until the last few centuries, the bulk of humanity was confined to activities that, while often fruitful, meaningful, and God-glorifying in their basic aim and end, did not leverage individual “giftings” in ways we would deem “fulfilling” or “dignifying” today.

Our economic situation has surely improved in the years since, with vocational opportunities and overall prosperity continuing to expand and improve in profound and unexpected ways. But many still find themselves in positions or careers that are difficult to endure, from the anxieties of a Wall Street executive to those of an underpaid farm hand.

Each of us is going to encounter our own unique challenges, driven by and toward our own particular calling. Although we ought to try our best to improve the alignment of such service in a fallen world, the persistent need for hard and rough work is bound to remain as long as it remains a fallen world. (more…)

Blog author: jballor
Tuesday, July 22, 2014
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Idle RichOver at his blog, Peter Boettke writes, “The idle rich are never really idle in a free market economy.”

Now while we might want to distinguish between the rich and their riches, could it be that even in their consumption, conspicuous or otherwise, the rich are contributing to a rising tide that lifts all boats? Wesley Gant makes that related case over at Values & Capitalism: “Is It Possible to Waste Money?”

Gant seems to conclude that it isn’t possible to “waste” wealth. “Humans do not consume resources; they create and exchange them,” he says.

One might argue, however, as John Mueller does, that humans create and exchange things, but that they also consume and distribute them. It’s a truncated and reductionist economism that doesn’t do justice to that fuller picture. A basic problem with this kind of view is that it cannot distinguish between types of consumption. Maybe we need “ethics” rather than “economics” proper to do so, but that just goes to show the limitations of the economic way of thinking.

On Gant’s account, it would seem that there is no such thing as bad stewardship. Now it may be that consumption of luxuries is not always bad, or that such consumption often does have some redeeming virtues. But is it the case that such reasoning can justify any exchange or consumption? (As long as it doesn’t involve the government, of course!)

Perhaps the guy who got the one talent and buried it in the ground should have just given the wealthy owner a basic lesson in such economics.

cherrypieShould we always take the side of the individual consumer?

That’s the question Rod Dreher asks in a recent post on “Amazon and the Cost of Consumerism.” It’s a good question, one that people have been asking for centuries. The best answer that has been provided—as is usually the case when it comes to economic questions—was provided by the nineteenth-century French journalist Frédéric Bastiat.

Bastiat argues, rather brilliantly, that,

consumption is the great end and purpose of political economy; that good and evil, morality and immorality, harmony and discord, everything finds its meaning in the consumer, for he represents mankind.

He summarizes his argument as follows:

There is a fundamental antagonism between the seller and the buyer.

The former wants the goods on the market to be scarce, in short supply, and expensive.

The latter wants them abundant, in plentiful supply, and cheap.

Our laws, which should at least be neutral, take the side of the seller against the buyer, of the producer against the consumer, of high prices against low prices, of scarcity against abundance.

They operate, if not intentionally, at least logically, on the assumption that a nation is rich when it is lacking in everything.

Bastiat uses this as the basis of his argument that the interests of the consumer, rather than the producer, align more closely with the interests of mankind (see addendum below for more on this reasoning). Producers want scarcity since it increases their profits. If they can’t produce scarcity in the market, they’ll seek out government protections that create artificial scarcity (which is why those who are pro-business are rarely pro-market).

Book publishers don’t like the fact that Amazon is reducing the scarcity of their product, because it lowers the cost. But what is the result from the consumer side? The lower prices allow consumers to consume more books than they otherwise would be able to afford.
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Blog author: ehilton
Tuesday, July 22, 2014
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Economics, at first glance, doesn’t seem very…well…sexy. It’s all about numbers, right? How the stock market is doing, how much people are willing to spend on stuff they need or want, whether or not people have jobs. That’s economics, right?

As the Rev. Robert Sirico is fond of saying, economics is fundamentally about human action. If this is true, then economics applies to sexual activity as well. In the following video (from the Austin Institute), today’s sexual landscape is examined through the lens of economic truisms.

Recently, the World Bank agreed to partner with Nicaragua to give the country 69 million U.S. dollars in aid. This poses the immediate question of whether or not this aid will be effective in producing its stated goal of decreasing poverty and increasing economic productivity. Should the World Bank continue to give money to the government of Nicaragua, which – especially of late – has been showing a decrease in political stability and democratic processes? History shows that international loans provide little help when countries suffer from decreases in stability and equality within their system.

The World Bank justifies the money that Nicaragua receives: “Nicaragua has achieved a real Gross Domestic Product (GDP) growth of 5 percent in 2012 and 4.6 percent in 2013, returning to pre-crisis growth levels.” GDP, however, does not paint a complete picture of the country’s performance. Most of the wealth within Nicaragua is located among the upper class, making the GDP less accurate for the country as a whole. Gross Domestic Product in purchasing power parity (PPP) in 2012 was estimated at $20.04 billion USD, and GDP per capita in PPP at $3,300 USD, making Nicaragua the second poorest country in the Western Hemisphere.
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As leaders of HOPE International, an organization that empowers men and women across the globe through business training, savings services, and small loans, Peter Greer and Chris Horst have witnessed the transformative impact entrepreneurship can have on individuals and communities, particularly when paired with the power of the Gospel.

In Entrepreneurship for Human Flourishing, a new book for AEI’s Values and Capitalism project, they explore this reality at length, offering compelling stories of businesspeople that illustrate the profound importance of free enterprise and entrepreneurship in equipping the poor and empowering the marginalized.

Watch the trailer for the book here:

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Integrated Justice - front cover (1)Christian’s Library Press recently released Integrated Justice and Equality: Biblical Wisdom for Those Who Do Good Works by John Addison Teevan, which seeks to challenge popular notions about “social justice” and establish a new framework around what Teevan calls “biblically integrated justice.”

Weaving together thought and action from a variety of perspectives and points throughout history, Teevan offers a refreshingly integrated economic, philosophic, and biblical framework. For young evangelicals in particular, who have grown fond of leveraging the vocabulary of “justice” and “equality” toward particular aims and ends, Teevan’s blend of careful analysis and practical application offers a needed challenge to the status quo.

To celebrate the release, CLP will be giving away three copies of the book. To enter, use the interface below. There are three ways to enter, and each will increase your odds. The contest will end Friday night (July 18) at 11:59 p.m.

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