Category: Economics

Randy Lewis

Randy Lewis and his son Austin

Those with disabilities face unique challenges in the workplace and with regards to vocation. As I recently wrote regarding the story of Jamie Bérubé, a young man with Down syndrome, we ought to be more attuned to these challenges and respond accordingly, rejecting limited notions of “value” and instead viewing all human persons as creators and contributors.

I was therefore heartened to read the story of Randy Lewis, a senior vice president at Walgreens, whose son, Austin, faced similar obstacles as someone with autism, but who responded by creating new opportunities for Austin and others like him.

Lewis outlines the full story in his book, No Greatness without Goodness, but offers a good summary in a recent article for Christianity Today, beginning with the change that took place in his own perspective:

As a parent and an employer, I saw the obstacles that people with disabilities face in securing employment. They may not be able to get through the on-line application process, may not interview well, may not be able to learn the way we are used to training, may have inconsistency in their employment history. They face death by a thousand cuts. And the unkindest cut? The belief by 99.999% of us that people with disabilities really cannot do any job as well as a typically-abled person.

Watching my son progress taught me that we underestimate the abilities and contribution of people on the margins. Seeing the way Austin is dismissed or ignored by others gave me the courage to stand up for those who are unjustly overlooked and ignored. Loving my son helped me understand the pain of parents everywhere who lie in bed at night worrying about what will happen to their children after they are gone. A job could change the arc of a life. A job could provide independence. It could mean friends and a social life. A job could be a source of satisfaction and purpose. (emphasis added)

Lewis became so moved by the untapped potential of his son that he decided to take action, pursuing a real, tangible way for those with disabilities to add value in the marketplace. (more…)

JMM_17 1As a new feature for the Journal of Markets & Morality, the folks at Journaltalk have helped us create discussion pages for the editorial and each of the articles of our most recent issue, vol. 17, no. 1 (Spring 2014). The issue is forthcoming in print in the next few weeks but already published online. While all articles require a subscription (or a small fee per article), this issue’s editorial on the state of academic peer review is open access.

Just another reason to sign up for or recommend a subscription to the Journal of Markets & Morality.

Subscription information can be found here.

Our most recent issue (17.1) can be found here.

And be sure to check out discussions on other articles and publications at Journaltalk here. It looks to be a promising forum for continuing discussion of academic research and scholarship.

This morning, Acton Institute President Rev. Robert A. Sirico took some time away from his preparations for Acton University to speak with Jim Engster, host of The Jim Engster Show on WRKF radio in Baton Rouge, Louisiana, discussing how to address the issue of poverty in society, and the approach taken by Pope Francis and the church in general to that and other issues. They also discussed the problems with the ObamaCare model of health-care reform, among other issues. You can listen to the interview using the audio player below.

Blog author: ehilton
posted by on Friday, June 13, 2014

pills and billsWhile Michelle Obama grows vegetables in the White House garden, her husband’s administration grows every government program it can. At The Federalist, Sean Davis gives 12 reasons why Medicaid should not be expanded.

Since Medicaid is a health care program, we should see some improvements in American’s health, right? Not so, and this is Davis’ first reason why we should not consider expanding this program.

According to an extensive, randomized study of people who enrolled in Oregon’s 2008 Medicaid lottery, Medicaid doesn’t improve the health outcomes of its patients, even after controlling for major health predictors like income and pre-existing health status. The researchers tracked the health progress of people who were admitted into the program and who people who applied but did not get selected by the lottery. According to the researchers, one of whom helped craft Obamacare, while the program led to people using more health services, those services didn’t actually make them physically healthier…

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bratI had a chance to talk with Michelle Boorstein yesterday about David Brat and a bit of his work that I’ve been able to become familiar with over the past few days. She included some of my comments in this piece for the Washington Post, “David Brat’s victory is part of broader rise of religion in economics.”

I stressed that Brat’s research program, which in many ways emphasizes the relationship between Christianity and capitalism, has at least two basic features. First, he’s focused on increasing theological awareness of economic realities: “I never saw a supply and demand curve in seminary. I should have.” This kind of increased economic sensibility would help the church to be a positive factor for social cultural change: “The church needs to regain its voice and offer up a coherent social vision of justice and rationality.”

But on the other hand, Brat has a message for economists as well. He challenges the mainstream assumption of economics as merely a positive, value-free science that can provide objective answers to questions without the trappings of morality or religion. A comment on Boorstein’s piece illustrates this important aspect of Brat’s work:

Dave helped me understand the essentiality of the links between capitalism (voluntary exchange that serves both parties’ interests) and theology (man’s obligation to serve God through work and use gain to carry out Jesus’ admonition to help the poor). At first, I thought he was joking. Surely one did not have to embrace a theological perspective to be a good capitalist. But he was not joking. I now have a much more nuanced and mature understanding of the “moral foundations of capitalism” than I did before I met Dave.

Brat’s faculty page includes portraits of John Calvin, Adam Smith, Friedrich Hayek, and John Maynard Keynes. Obviously there’s a lot to David Brat and I look forward to becoming more familiar with him and his work.

Amid all of the bad reportage out there on Brat, and there is so much that it is hard to keep up, here are a few other pieces that I have found to be helpful:

Blog author: jcarter
posted by on Thursday, June 12, 2014

MoneyRoll

Note: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.

The Term: Money

What it Means: In economics, money is a broad term that refers to any financial instrument that can fulfill the functions of money (more on that in a moment).

There are three basic ways to exchange goods and services: gifting (e.g., I give you a banana, expecting nothing in return); barter (e.g., I give you a banana, in exchange you give me an apple); by using money (e.g., I give you a banana, in exchange you give me $1). Money was invented (and reinvented in every culture) because it makes exchanges easier than the barter system.

What Money Is: Money is a shared belief system used to simplify exchanges of goods and services. To be used as money people have to share a belief that the item —whether paper, gold, rocks, etc. — can perform three main functions: be a store of value, be used as a unit of account, and serve as a medium of exchange.

In the next section we’ll examine these functions. For now, here are two examples of how money serves as a shared belief system:
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davebratLast night, economics professor David Brat surprised everyone in defeating House Majority Leader Eric Cantor (R., Va.) in a primary challenge for Virginia’s 7th congressional district. Predictably, the media is now a-buzz about Brat, rapidly catching up on his beliefs, his plans, and so on.

Time will tell as for whether Brat is successful as a politician, and whether he is, in fact, a strong conservative alternative to his predecessor. But one item that sticks out in Brat’s academic CV is his unique interest in the intersection of economics and theology.

Currently an economics professor at Randolph-Macon College in Ashland, Va., Brat holds a B.A. in Business Administration from Hope College in Michigan, a Master’s degree in Divinity from Princeton Theological Seminary, and a Ph.D in economics from American University. I’m sure there are plenty of places to explore his thoughts on these matters, but one place of particular interest is an essay he wrote titled, “God and Advanced Mammon: Can Theological Types Handle Usury and Capitalism?”

Although the essay aims specifically at the issue of usury, in his analysis of the topic, we begin to see the deeper theology and philosophy that steers Brat’s political and economic thought.

Given the length of the essay, the following excerpts are offered simply as a taste of where he’s coming from. Emphasis is added wherever text is bolded.

Regardless of how and whether Brat actually succeeds in governing, his profound interest in the intersection of economics and theology is a feature we should hope to see more of in the political arena.

Brat on capitalism:

Capitalism is the major organizing force in modern life, whether we like it or not. It is here to stay. If the sociologists ever grasp this basic fact, their enterprise will be much more fruitful…Capitalist markets and their expansion in China and India have provided more for the common good, more “social welfare,” than any other policy in the past ten years. In fact, you can add up all of the welfare gains from public policy in the United States and abroad, and they will not approach the level of human gains just described. Incomes in China and India have risen from $500 a year per person to over $5,000 a year per person over the past twenty years or so. This is due to market capitalism. Over two billion people now have food to eat and some minimal goods to go along. (more…)

edmund burke 1In his new book, The Great Debate, Yuval Levin explores the birth of America’s Left and Right by contrasting the views of Thomas Paine and Edmund Burke. I’ve written previously on his chapter on choice vs. obligation, and in a recent appearance on EconTalk, Levin joins economist Russell Roberts to discuss these tensions further, addressing the implications for libertarians and conservatives a bit more directly.

It should first be noted that Roberts and Levin offer a dream pairing when it comes to such discussions. Roberts, a self-professed libertarian and classical liberal, offers each guest a unique level of intellectual empathy, meeting even the most vigorous intellectual opponents at their best and brightest arguments (see his discussions with Jeffrey Sachs). Likewise, Levin, while a true-and-through conservative, is not prone to the variety of anti-libertarian caricatures that predominate the Right. If we hope to uncover the actual distinctions between the two, these men are up to the task, and the historical context makes it all the more meaty. Listen to the whole thing here.

About halfway through (36:39), Roberts asks Levin directly how a libertarian might discern between Burke and Paine, admitting sympathies for both sides. Levin answers with a lengthy response, noting, first, how libertarians typically take a more Burkean approach to centralized knowledge and power:

There is a strong and important strand of libertarianism that is very Burkean, because it emphasizes especially the limits of our knowledge and the kind of skepticism about the uses of power. And so ultimately believes that power needs to be restrained because there are permanent limits on what we can do…And it inclines many libertarians to market economics and to restraints on the role of government and the power of government. And in that sense aligns them with a lot of Conservatives who think more like Burke. (more…)

Blog author: jwitt
posted by on Monday, June 9, 2014

My older son’s college psychology class was recently assigned the film A Beautiful Mind, about the Nobel Prize winning economist and schizophrenia sufferer John Nash. The assignment was to watch the film, dig into Nash’s biography, and report on how the film altered Nash’s story of mental breakdown and recovery.

78A_Beautiful_Mind

We watched the film together as a family (my second viewing), checked out the biography by Sylvia Nasar from a local library, and generally geeked out on Nash and game theory at the family dinner table over the next few days.

An additional motivation for the interest was that my mom’s engineer brother, my Uncle Milton, was a classmate of Nash’s at Carnegie Tech in the 1940s, with the two reconnecting at their 50th college reunion. In our digging into the Nash’s biography, we learned something of particular relevance to Acton Institute friends and followers, something I probably should have known already but didn’t: Nash’s decisive contribution to game theory likely has Austrian economics in its blood line. (more…)

Blog author: jcarter
posted by on Friday, June 6, 2014

bankruptcyThe Bible has a lot to say about the principles behind bankruptcy law, says T. Kyle Bryant. In the Old Testament, God gave Moses various laws concerning the poor, lenders, borrowers, and debt forgiveness.

From these passages, we get a glimpse of how God makes provision for people who cannot pay their debt after a certain number of years. Beside discouraging lenders from making “bad” loans (ones that could not be repaid in seven years), the law prevented overwhelming debt from ruining a person’s life forever. In this way, God’s law provided for a type of bankruptcy protection every seven years (and every 50 years for land).

The United States bankruptcy scheme is complex, but the similarities between it and the biblical system are striking. Both systems served to protect the relatively powerless consumers and give predictability and stability to the creditors. For example, in the Israelite law, debtors could be released from their debts every seven years—no matter the amount of the debt, it was gone. This prevented common debtors from having to sell themselves into slavery in perpetuity to pay for their debts. On the other hand, it gave a stable and predictable risk profile to creditors seeking repayment of those debts. Lenders could temper their desire to make risky loans with the knowledge that any chance of repayment after the seventh year was uncertain.

In a similar way, the Bankruptcy Code allows a person freedom from their debt every eight years. Chapter 7 of the Bankruptcy Code governs (in large part) individual debtors and the discharge of a person’s debt. If someone has received a discharge of their debt under Chapter 7, they must wait eight years before they can file for bankruptcy again. This echoes the biblical pattern of debt being wiped away every seven years. (But whether this tempers creditors’ risky lending practices is another question).

Read more . . .