Category: Economics

Coal power plant Datteln 2 Crop1Today at The Federalist I explore “Why Big Oil Wants A Carbon Tax.” Perhaps such advocacy isn’t just made out of a sense of global citizenship and environmental stewardship.

On the surface such advocacy may seem counter-intuitive. Why on earth, other than out of selfless benevolence, would a firm (or group of firms) advocate for higher taxes on their products? But on reflection, it makes some sense, and the reasoning is similar to why an online retailer like Amazon might be in favor of the collection of sales tax at the state level.

As Adam Smith famously put it, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

Companies are often happy to raise prices if it hurts their competition or provides them with a competitive advantage. And in the case of carbon taxes, it’s important to recognize that not all fossil fuels are equally carbon-intensive, just as not all renewable sources are equally sustainable and resilient.

This is one of the economic realities that I wish Pope Francis had recognized more clearly in Laudato Si’, although I may have more to say about this later. For now, David Brooks expresses a similar desire in his column, “Fracking and the Franciscans.”

“For as the soil makes the sprout come up and a garden causes seeds to grow, so the Sovereign Lord will make righteousness and praise spring up before all nations.” -Isaiah 61:11

Jean Marie owns a restaurant and farm in southern Rwanda. After his first year in business, he worked with Urwego, a local micro-finance partner with HOPE International, to secure a loan to purchase more animals and improve his land’s fertility.

Today, he employs 8 people, supports 11 orphans, and has 5 children:

His story is another great example of how something as simple as access to capital can be a key to achieving success and stability in the developing world. And yet Jean Marie’s story points to something even more crucial: a love for Jesus, faithful obedience, and the fruit of both across family, community, and enterprise. (more…)

george horrifiedIn today’s Public Discourse, Acton’s director of research, Samuel Gregg, discusses the enormous debt crisis the U.S. and many nations currently face. While debt crises are hardly new, Gregg states, America’s current debt situation is frightening.

America’s public debt amounts to approximately 105 percent of GDP. Since 20 January 2009, America’s total outstanding public debt has grown from $10.626 trillion to $18.152 trillion as of May 8 this year. Such an increase reflects a consistent disparity between government revenues and expenditures that has long plagued America’s public finances.

What’s driving this debt? Gregg’s response: the welfare state. (more…)

Doug Bandow, member of the Advisory Board at the Acton Institute and Senior Fellow at the Cato Institute, penned an exclusive article for the Acton Institute on the economic effect of the encyclical:

In Calling on Government, Laudato Si Underestimates Power of the the Market

by Doug Bandow

Pope Francis’ new encyclical, Laudato Si, offers a challenging read. That’s why he addresses his message to “every person living on this planet.” In his view “the earth herself, burdened and laid waste, is among the most abandoned and maltreated of our poor.” He advocates not only a practical political response, but more importantly calls mankind to a new “ecological spirituality.”

Indeed, his role, the Pontiff explains, is to help the rest of us apply the “rich heritage of Christian spirituality, the fruit of twenty centuries of personal and communal experience,” to the world around us. The Gospel should affect how we think, feel, and live. We should relate through it not only to people around us, but the entire environment.


Blog author: ehilton
Tuesday, June 23, 2015

Economist Nicole Gelinas, a fellow at the Manhattan Institute, explains the recent financial crisis in this brief video. Did banks fail us? No, she says. The problem is that the U.S. government has become too closely tied to banks, enabling their bad financial practices.

Doug Bandow, advisory board member of the Acton Institute, praises the new encyclical for its understanding of man and religion, but criticizes it for its lack of knowledge of economics and politics in an article for The American Spectator.

Despite his commitment to ecological values, the Holy Father acknowledges that “a return to nature cannot be at the expense of freedom and the responsibility of the human being, that is the part of the world tasked with cultivating its ability to protect and develop their potential.” He also rejects “deification of the earth, which would deprive us of the call to collaborate with it and protect its fragility.”

Nevertheless, humanity’s responsibility for the environment is complex and the Pope discusses ecological values in the context of economic development and care for the poor. How to creatively transform but at the same time gently preserve the natural world is not easy. Unfortunately, in its policy prescriptions Laudato Si sounds like it was written by an advocate, largely ignoring countervailing arguments. The resulting factual and philosophical shortcomings undercut the larger and more profound theological discussion.

Read the full article “Praise ‘Be Praised’ for Its Intent, not Execution” at The American Spectator.


Peter Johnson, external relations officer for the Acton Institute, discusses the muddled economic message in the recent encyclical for The Federalist:

While I don’t doubt for a moment that Pope Francis sincerely wants to help the poor, I think it would be difficult for even the most erudite Catholic scholars to find a coherent message in a passage like this.

For example, he praises business as a “noble vocation” while summarily disparaging “economies of scale.” While he recognizes that poor people need to be connected to the larger economy to rise out of poverty, he also encourages “civil authorities” to constrain those in the larger economy who actually have the capital to invest in new enterprises.

This vacillation between upholding the merits of enterprise and disparaging profits runs throughout the encyclical. If I could sum up his view on commerce in one sentence it would be this: Business is okay, as long as you don’t make too much money.

Read the entire post “Pope Francis’ Incoherent Economics” here at The Federalist.

Alexis_de_tocqueville_croppedWhat is social justice? Is it a vision of a perfectly just society? Is it an ideal set of government policies? Is it a particular theory or practice? Is it a virtue? A religious concept? A social arrangement?

In a lecture at Acton University on his forthcoming book, Social Justice: What It Is, What It Isn’t, Michael Novak sought to answer some these questions with a particular framework around intermediary institutions.

Offering a broad survey of the term’s origins, history, and modern use and application, Novak countered modern misconceptions of social justice (e.g. as another word for equality), and sought to outline a definition that’s (1) connected to the original understanding, (2) ideologically neutral, and (3) applicable to current circumstances.

Leaning first on Pope Leo XIII for an original understanding, he proceeded to channel Alexis de Tocqueville, describing social justice in terms of our activity in basic, day-to-day associations. This begins with religion, of course, which “dominates our hearts,” he said, without the support of the state, and in turn, transforms our orientations and imaginations toward citizens, institutions, and law. With this as the basic order of things, social justice begins when the individual rightly understands his relation to God, and proceeds to engage with civilization accordingly. (more…)

monkIn a lecture on markets and monasticism at Acton University, Dylan Pahman gave a fascinating overview and analysis of the interaction between Christian monasticism and markets. He’s written on this before and has a longer paper on the topic as well.

In the talk, he highlighted a range of facts and features, from monastic teachings on wealth and poverty to the historical realities of monastic communities and enterprises. Over the centuries, monasteries have contributed a host of products and services to civilization and culture, often countering the common assumption that all such communities are flatly against trade, production, and wealth creation.

One point that stood out in particular was Pahman’s summary of a recent study by Nathan Smith, in which Smith ponders how these communities have managed to succeed for so long, particularly given their many (internally) socialistic traits. According to one study, the average longevity of monasteries is 463 years(!), which is far longer than the lifespan of most companies and states, never mind your run-of-the-mill secular commune (Portlandia variations included).

There are a variety of forces that may contribute to this, including unique pressures of lifelong commitment, corresponding theological reinforcement, etc. But when it comes to some of the more universal traits that help monastic communities thrive, they may offer some lessons to help orient and affirm our broader thoughts about community in the context of work, trade, enterprise, and worship. (more…)

Samuel Gregg, director of research at the Acton Institute, spoke with Business Spectator about the economic message of the new encyclical:

When you read through the text, you find the free market, and finance in particular, is identified more or less as responsible for many environmental problems, Dr Gregg said.  It’s almost a subterranean theme of the encyclical …In many respects it’s a caricature of market economies.

Read more at “Pope Delivers Strong Message on Climate Change.” from Business Spectator.