Category: Economics

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 . . .

Blog author: jcarter
posted by on Wednesday, June 4, 2014

econwatchjournalThe latest edition of Econ Journal Watch has a symposium, co-sponsored by the Acton Institute, on the question, “Does Economics Need an Infusion of Religious or Quasi-Religious Formulations?

In his essay “On the Usefulness of a Flat
Economics to the World of Faith
“, Andrew P. Morriss considers the role of faith in correcting how economics flattens the perception of human nature and human existence:
(more…)

Jamie Bérubé

Jamie Bérubé

In a powerful profile of his son Jamie, a young man with Down syndrome, Michael Bérubé explores some of the key challenges that those with disabilities face when trying to enter the workforce:

The first time I talked to Jamie about getting a job, he was only 13. But I thought it was a good idea to prepare him, gradually, for the world that would await him after he left school. My wife, Janet, and I had long been warned about that world: By professionals it was usually called “transitioning from high school.” By parents it was usually called “falling off the cliff.” After 21 years of early intervention programs for children with disabilities…there would be nothing. Or so we were told.

At 13, Jamie reported that he wanted to be a marine biologist. A very tall order, I thought; but he knew the differences between seals and sea lions, he knew that dolphins are pinnipeds, and he knew far more about sharks than most sixth graders. And despite his speech delays, he could say “cartilaginous fish” pretty clearly. Perhaps he could work at an aquarium?

Bérubé goes on to tell the story of Jamie’s education and upbringing, which includes the unfortunate descent from that lofty childhood dream to his current unemployment at age 22. “By the end of the year [at age 13]…Jamie had lowered his sights from ‘marine biologist’ to ‘marine biologist helper,’ Bérubé writes. “And by the end of eighth grade…when he was asked what he might do for a living when he graduated, he said dejectedly, ‘Groceries, I guess.’”

Despite testing at rather high levels for his disability, and despite having years of experience working in various low-wage and volunteer jobs, Jamie continues to struggle in his search for a career, even in areas like factory work, food service, or hospitality. (more…)

Blog author: jcarter
posted by on Tuesday, June 3, 2014

econwatchjournalThe latest edition of Econ Journal Watch has a symposium, co-sponsored by the Acton Institute, on the question, “Does Economics Need an Infusion of Religious or Quasi-Religious Formulations?

In his essay “Joyful Economics“, Victor V. Claar reflects upon his life as a Christian and how it has connected to his work as an academic economist. Claar offers a few suggestions about the distinct contributions Christian economists can make in this field of study:
(more…)

Blog author: jballor
posted by on Friday, May 30, 2014

The Acton Institute is proud to sponsor the latest symposium in Econ Journal Watch: “Does Economics Need an Infusion of Religious or Quasi-Religious Formulations?”

EJWEJW editor Daniel B. Klein introduces the theme in a fine Prologue, in which he writes, “our focus is the enrichment of economics: Is economics suffering from an undue flatness? If so, why is that happening? If economics needs an infusion of richer concepts, what are some of the richer concepts? Also, if economics needs an infusion, for what purposes is it that such infusion is needed? What purposes is economics trying, but failing, to serve, because it lacks richer concepts?”

Robin Klay of Hope College and an executive board member of our own Journal of Markets & Morality opens the symposium with a survey of the landscape on these questions with her contribution, “Where Do Economists of Faith Hang Out? Their Journals and Associations, plus Luminaries Among Them.”

EJW has put together another 17 response essays, in which luminaries in their own right weigh in on the theme from a variety of religious and methodological perspectives. Browse this issue of EJW and download the entire issue for your own perusal as well.

And for more reflection on the intersection of theology and economics, be sure to check out the Journal of Markets & Morality. The archived issues are open access, and to get the latest two issues in either digital or hardcopy format, you can get a subscription for yourself or recommend it to a colleague or institutional library. Last month I also lectured at the Henry Center at Trinity Evangelical Divinity School on “A Match Made in Heaven: Why Theology and Economics Need Each Other,” with a substantive and engaging response and discussion afterwards with Stephen Long of Marquette University.

Kevin Allen, host of a weekly call-in show on Ancient Faith Radio, interviewed Fr. Michael Butler over the weekend “about how we might address the environmental issues that confront us today by appealing to the authentic Orthodox Tradition.” Fr. Michael is the author, with Prof. Andrew Morriss, of the 2013 Acton monograph Creation and the Heart of Man: An Orthodox Christian Perspective on Environmentalism.

In their April 23 commentary “Christian Environmentalism and the Temptation of Faux Asceticism” the authors note:

The ascetical tradition of the Orthodox Church includes many practices: prayer, fasting, almsgiving, keeping vigil, inter alia. They are the active part of the spiritual life, our voluntary cooperation with the grace of God. As such, it is important that we not be tempted to use the ascetical practices of the Church for ends they were not designed to serve. Thus, we need to be careful of “environmental consciousness” masquerading as authentic spiritual practice. Moreover, we must keep in mind that it is the believer’s practice of asceticism, not asceticism qua asceticism, that is important. (more…)

A couple of interviews to bring you up to speed on from that last couple of days:

First of all, here’s Acton Director of Research Samuel Gregg on the GRN Alive morning show on the Guadalupe Radio Network this morning to discuss current efforts to raise the federal minimum wage, giving his analysis on the likely impact of such a move on the economy and the job market.

And from yesterday, here’s Acton co-founder and President Rev. Robert A. Sirico with host Mike Rosen on The Mike Rosen Show on 850 KOA in Denver, Colorado, to discuss Pope Francis’ recent comments to United Nations officials, which included remarks on “legitimate redistribution of economic benefits by the State.” Rosen and Sirico speak extensively about Catholic teaching on economics, and about the misleading nature of the term “trickle-down economics.”