Category: Economics

“Globalization must do more than connect elites and big businesses that have the legal means to expand their markets, create capital, and increase their wealth.” –Hernando de Soto

6898950_7a0fd3b3d9_bWhen assessing the causes of the recent boom in global prosperity, economists and analysts will point much of their praise to the power of free trade and globalization, and rightly so.

But while these are important drivers, we mustn’t forget that many people remain disconnected from networks of productivity and “circles of exchange.” Despite wonderful expansions in international free trade, much of this has occurred between “outsiders,” with many partners still languishing due to a lack of internal free trade within their countries.

Much of this is due to an absence of basic property rights, as economist Hernando de Soto argues throughout his popular book, The Mystery of Capital. If the global poor don’t have the legal means or incentives to trade beyond families and small communities, so-called “globalization” will still leave plenty behind. (more…)

Whether derided as a devil of modern industry or hailed as a saint of modern philanthropy, oil tycoon John D. Rockefeller remains a controversial figure.

Although the reality of the man is surely complex, those who attack his legacy tend to indulge in more than a few historical errors and economic myths, painting him as a supreme symbol of all that is wrong with industrialization and capitalism. And yet, despite some troubling tactics and cronyist maneuvering, the man himself is a symbol of much that is good.

As historian Burt Folsom explains, the real picture has a bit more color and brightness. Contrary to his critics, Rockefeller’s empire prioritized ingenuity above indulgence, gift-giving above greed, and economic transformation above static consumerism.

Rockefeller’s special gift to the world? “Cheap kerosene,” says Folsom, and “cheap enough that anyone could buy it.” (more…)

Acton Research Director Samuel Gregg, writing for The American Spectator, looks at the telltale signs of a great civilization in decline.

Many of us think of civilizational failure in terms of a society’s inability to withstand sudden external encounters. The sun-worshiping human-sacrificing slave-owning Aztec world, for instance, quickly crumbled before Hernán Cortés, a handful of Spanish conquistadors, and his native allies, and, perhaps above all, European-borne diseases. Given enough violence, superior technology, and the will to use it, an entire culture can be seriously destabilized, if not swept aside. Yet ever since Edward Gibbon’s multi-volume Decline and Fall of the Roman Empire, it’s been impossible to downplay the role of internal vicissitudes in facilitating civilizational degeneration.

More than one person, I suspect, has been wondering lately about this issue of civilizational decline with regard to the West. Whether it’s Planned Parenthood’s diabolical activities, America’s de facto capitulation to Iran, Western governments’ failure to eradicate the cancer that is ISIS, or the same governments’ general unwillingness to overhaul their dysfunctional welfare systems, it’s harder and harder to deny that something deeper is seriously awry.

Read “Fear and Loathing Stalk the West” in The American Spectator by Samuel Gregg.

The highly popular “buy-one, give-one” models — as epitomized by the popular TOMS Shoes brand — have long held the attention of Western do-gooders. It’s quick, it’s easy, and hey, people like the shoes. And let’s not forget the power of the Warm & Fuzzies.

Yet many are beginning to raise concerns about the actual impact of these activities. As Acton’s Michael Matheson Miller recently explained in an interview with Knowledge@Wharton, “The one-for-one model can undermine local producers. When you give free things, why would you buy local shoes?”

In the debut of his new smarty-pants comedy show, “Adam Ruins Everything,” Adam Conover chooses to set his sights on precisely this:

To their credit, TOMS Shoes has taken certain steps to reconsider its model, including a decision to “employ 100 Haitians and build a ‘responsible, sustainable’ shoe industry in Haiti.” But alas, by all public appearances, there is still a ways to go. (more…)

kickstarter1Several years ago, as a music student in college, I remember hearing constant complaints about “lack of funding for the arts.” Hardly a day would go by without a classmate or professor bemoaning the thin and fickle pockets of the bourgeoisie or Uncle Sam’s lack of artistic initiative.

Little did we know, a shake-up was already taking place, driven by a mysterious mix of newfound prosperity, entrepreneurial innovation, and the market forces behind it. The digital revolution was beginning to level the playing field and drain power from tanks and banks of all kinds, from the Hollywood execs with dollar signs in their eyes to the aesthetically enlightened cronies at the National Endowment for the Arts. Despite the many prophecies of a creative apocalypse, a bottom-up revolution was taking place.

Amid the sea of new technologies and tools that were soon to emerge — streaming music, streaming movies, ebook publishing — crowdfunding rose as a powerful path to creative independence: artistic, economic, and otherwise. Leading the pack is Kickstarter, with success stories abounding, from inventors to thespians to foodies to photographers, and with routine funding results that actually surpass the NEA. (more…)

Blog author: dpahman
Thursday, September 24, 2015

Today at the Library of Law and Liberty, I take a cue from probablist Nassim Nicholas Taleb and call for the commemoration of a National Entrepreneurs Day:

One has been proposed in the U.S. House of Representatives, and probabilist Nassim Taleb has given us a fully developed argument as to why we should have one. I second the motion. In Antifragile, his 2012 book, Taleb confesses that he is “an ingrate toward the man whose overconfidence caused him to open a restaurant and fail, enjoying my nice meal while he is probably eating canned tuna.”

This lack of gratitude is a moral failing of all of us in modern society, says Taleb. Hence his idea:

In order to progress, modern society should be treating ruined entrepreneurs in the same way we honor dead soldiers, perhaps not with as much honor, but using the exact same logic. . . . For there is no such thing as a failed soldier, dead or alive (unless he acted in a cowardly manner)—likewise, there is no such thing as a failed entrepreneur or failed scientific researcher.


francisgmo62815“Defending capitalism on practical grounds is easy,” writes economist Donald Boudreaux at the Mercatus Center. “It is history’s greatest force for raising the living standards of the masses.”

What’s more difficult, it seems, is understanding its moral logic, spiritual implications, and which of each is or isn’t inherent to private ownership and economic exchange.

At what level, for instance, is freely buying a gallon of milk at a freely agreed-to price from a freely employed worker at an independent grocery store an act of sin, idolatry, and exploitation? Such basic transactions are, after all, the bread and butter of a system built on free enterprise and open exchange (i.e. capitalism). From here, it gets more complicated, of course, and even that basic starting point can surely involve corrupt actors and action.

Yet even Pope Francis, discernor of the discerning, seems to struggle in locating Point A of that basic logic, even when railing against its banner. I tend to presume that basic milk purchases are not, in fact, his actual target. But then he continues and without qualification, railing against markets at large and ripping at plenty of positives that dangle well outside the deserving injustices of cronyist corporatism.

The Pope prefers to argue not that capitalism “has its faults” or “demands a virtuous society,” but rather that it is a “new tyranny,” one that followed the ills of communism, but filled the void with something just as tragic. (more…)