Category: Economics

This is a bit second-hand (a source drawing from another source), but I still think the following tidbit on the modern history of clergy and scientific and technological development and discovery in the nineteenth and early-twentieth centuries from Nassim Taleb’s Antifragile is notable:

Knowledge formation, even when theoretical, takes time, some boredom, and the freedom that comes from having another occupation, therefore allowing one to escape the journalistic-style pressure of modern publish-and-perish [sic, probably intentionally] academia to produce cosmetic knowledge, much like the counterfeit watches one buys in Chinatown in New York City, the type that you know is counterfeit although it looks like the real thing. There were two main sources of technical knowledge and innovation  in the nineteenth and early twentieth centuries: the hobbyist and the English rector….

An extraordinary proportion of work came out of the rector, the English parish priest with no worries, erudition, a large or at least comfortable house, domestic help, a reliable supply of tea and scones with clotted cream, and an abundance of free time. And, of course, optionality [i.e. freedom from intellectual strictures and the ability to change one’s mind based on new discoveries]. The enlightened amateur, that is. The Reverends Thomas Bayes (as in Bayesian probability) and Thomas [Robert] Malthus (Malthusian overpopulation) are the most famous. But there are many more surprises cataloged in Bill Bryson’s Home, in which the author found ten times more vicars and clergymen leaving recorded traces for posterity than scientists, physicists, economists, and even inventors. In addition to the previous two giants, I randomly list contributions by country clergymen: Rev. Edmund Cartwright invented the power loom, contributing to the Industrial Revolution; Rev. Jack Russel bred the terrier; Rev. William Buckland was the first authority on dinosaurs; Rev. William Greenwell the foremost authority on spiders; Rev. George Garrett invented the submarine; Rev. Gilbert White was the most esteemed naturalist of his day; Rev. M. J. Berkeley was the top expert on fungi; Rev. John Michell helped discover Uranus; and many more. Note that … the list of visible contribution by hobbyists and doers is most certainly shorter than the real one, as some academic might have appropriated the innovation by his predecessor.

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worker1One of our favorite coffee shops when we lived in Washington, D.C. in the 1980s was The Daily Grind. The name’s humorous wordplay about everyday work and the delicious fresh-roasted coffee made us smile.

But too many of God’s people are not smiling as their alarms sound and they head to their daily tasks. Recent surveys reveal their deep dissatisfaction in their jobs, with few finding joy and significance in their efforts. Last year, Barna Group reported 75 percent of American adults long for meaning, while less than 20 percent say they’re extremely satisfied with their current work.

Young adults in their 20s and 30s are unhappy about the disconnect between their educations and expectations and the scarcity of some jobs. Many are working two or three part-time jobs and waiting for their “destiny” and their “dream” opportunities.

It makes one wonder: Can work be purposeful when it is often boring, repetitious, and sometimes unjust, with nasty bosses and challenging work conditions? Is it truly possible to derive joy and meaning from a job? (more…)

Rosa’s Fresh Pizza in Philadelphia has now given away more than 10,000 slices of pizza, using a unique “pay-it-forward” system where “customers can pre-purchase $1 slices for those in need.”

The story is inspiring on a number of levels, illuminating the power of business to channel the best of humanity toward meeting complex needs in new and unexpected ways, often quite spontaneously.

The owner, Mason Wartman, left his job on Wall Street to start the restaurant, following his vocational aspirations and bringing a new product and service to this Philadelphia neighborhood. This is a great social benefit in and of itself, and yet the owner and his customers went further, responding to other signals in their community through generosity and innovation from the bottom up. As several homeless people in the video explain, the grace-filled approach of the business and its customers made a remarkable impact, giving them peace, encouragement, and empowerment. (more…)

robot 2When arguing about the merits of a free economy, its defenders often give way to a peculiar line of reasoning that goes something like this:

“Socialism would be wonderful if it actually worked, and it could actually work if only men were angels.”

Such claims are meant to frame socialists as foolish idealists obsessed with their silly utopias. But for those of us who believe there’s a certain idealism to the free society, it’s a rather appalling concession. Indeed, the fundamental problem with socialism isn’t so much that its aims are unrealistic — though they most certainly are — but rather that its basic assumptions rely on a view of humanity that is, in so many ways, unreal.

If we let the lofty levelers have their way, we shall inherit a world where humanity is robbed of its dignity and originality, discouraged from creativity and innovation, and restrained from the collaboration and relationship found in free exchange. Even if such a system were to be filled with morally superior know-it-alls and somehow achieve material prosperity, it would still be a society of serfs, submissive to their overlords’ enlightened plans for social “equity,” and thus, servile in all the areas where God intended ownership.

Is a land wherein humans are guided by mere robotic efficiency really something that’s all that wonderful, even if it actually “works”? In whose mind and through what sort of contorted imagination is this considered an “ideal” or “utopia”? (more…)

de Soto

de Soto

The work of Hernando de Soto has been followed closely for years at Acton and more recently at PovertyCure. See the 2001 interview “The Poor are the Solution, Not the Problem” in Religion & Liberty and a short film clip of de Soto talking about property rights and rule of law at PovertyCure. Search both sites and you’ll find much more. De Soto’s book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else is essential reading for those interested in his work and is available in the Acton book shop.

David Freddoso profiled de Soto earlier this week at Investor’s Business Daily.

Informality is a central concept in de Soto’s work on poverty. It describes the realm to which the Third World’s poorest are relegated — banished from their nations’ official economies to what he has called “the grubby basement of the precapitalist world.”

He argues that their exclusion — the product of a lack of enforceable property rights — holds back them and the entire world economy. It’s why capitalism, despite its triumph over communism and its wealth generation in America and Western Europe, has failed elsewhere. (more…)

“Being Godly doesn’t necessarily mean that you’re going to be wealthy. God makes no such guarantees in the Bible, so goodbye, prosperity gospel…[But] God clearly is not opposed to wealth in a kind of blanket way. He’s not even opposed, necessarily, to tremendous wealth, gobstopping amounts of money.” –Owen Strachan

In a lecture for The Commonweal Project at Southern Baptist Theological Seminary, Owen Strachan tackles the tough subject of whether it’s morally wrong for Christians to make lots of money. His answer: “No. But it could be.”

Although the unprecedented prosperity of the last century has been accompanied by unprecedented amounts of guilt and self-loathing, Strachan argues that “the focus of a true Biblical theology of wealth would be on how money is a gift from God.” Surely we need to be wary of the unique temptations that come with wealth, but when dedicated to, consecrated by, and stewarded in attentive obedience to God and the Holy Spirit, “it can be nothing less than an engine, a mighty engine, for spiritual good,” Strachan argues. (more…)

MallOfAmerica3Is the middle-class economically stagnant? And is “middle-class” a misnomer? Should we really be talking about the bottom of the economic pile? After all, isn’t the 1% controlling everything?

Cato Institute Senior Fellow Alan Reynolds says the government’s claim of middle-class stagnation is based on faulty statistics. In Monday’s Wall Street Journal, Reynolds quotes Sen. Elizabeth Warren (D., Mass.), speaking at an AFL-CIO conference: “Since 1980, guess how much of the growth in income the [bottom] 90% got? Nothing. None. Zero.”

Reynolds take on this?

Real personal consumption per person has tripled since 1968 and doubled since 1980, according to the BEA. Are all those shopping malls, big box stores, car dealers and restaurants catering to only the top 10%? The question answers itself. (more…)

Blog author: jcarter
Friday, February 27, 2015
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the-corporationWhat makes a company great? To find the answer, Jim Collins’s 21-person research team (at his management research firm) spent five years reading and coding 6,000 articles, generating more than 2,000 pages of interview transcripts, and creating 384 megabytes of computer data. His research identified 11 companies that met the criteria for transforming from a “good company” to one that had achieved “greatness.” Collins wrote about these companies in his book, Good to Great, which became a massive bestseller, selling over four million copies.

But the companies themselves didn’t always fare as well as the book about them. Circuit City went bankrupt in 2009, Fannie Mae was involved in the home mortgage scandal and was delisted from the New York Stock Exchange in 2010. Wells Fargo had to receive a government bailout in 2008 to keep from shutting down. As economist Steven D. Levitt noted in 2008, the returns on those 11 companies was not so great: a portfolio of the “good to great” companies would have underperformed the S&P 500.

Collins’s book sold well (and continues to do so, 14 years later) in large part because Americans of all stripes have an almost religious belief in the almost unlimited power—for good or ill—of corporations. We like to think that companies know what they’re doing and can largely control their futures (and ours). This is part of what Megan McArdle refers to as “corporation theology“:
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Blog author: dpahman
Friday, February 27, 2015
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Yesterday the FCC reclassified Internet Service Providers (ISPs) as a telecommunications service under Title II of the Communications Act, with additional provisions from Title III and Section 706 of the Telecommunications Act of 1996. This was done for the purpose of ensuring net neutrality or open internet access, requiring ISPs to treat all data on the internet equally. Notably, yesterday’s Order also includes mobile broadband for the first time as well.

In a press release, the FCC claims,

Together Title II and Section 706 support clear rules of the road, providing the certainty needed for innovators and investors, and the competitive choices and freedom demanded by consumers, while not burdening broadband providers with anachronistic utility-style regulations such as rate regulation, tariffs or network sharing requirements.

I have expressed concerns in the past about the smattering of regulations available under Title II, far beyond what would be required for net neutrality. On the surface, the press release would seem to indicate that the recent Order was designed to attempt to prevent those further regulations from being available to the FCC: (more…)

patricia-arquette-oscars-acceptance-speech-w724During last night’s Oscar ceremony, Best Supporting Actress winner Patricia Arquette used her acceptance speech to rail against unfair pay for women:

To every women who gave birth to every taxpayer and citizen of this nation, we have fought for everybody else’s equal rights. It’s our time … to have wage equality once and for all and equal rights for women in the United States of America.

The wage equality that Arquette is referring to is the gender wage gap—the difference between male and female earnings expressed as a percentage of male earnings. Because she frames the issue as a matter of equal rights, Arquette presumably believes that the problem is caused by intentional discrimination.

The gender wage gap certainly exists, but there is considerable debate about the size of the gap and whether it is caused primary by discrimination or by other factors, such as education and work hours. Much of the confusion is caused by the use of misleading statistics by politically motivated groups. For example, last night the Department of Labor (DOL) posted on their Twitter account:
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