Category: Economics

poor-working-class-family-after-the-days-workCapitalism is routinely blamed for rampant materialism and consumerism, accused of setting society’s sights only on material needs and wants, and living little time, attention, or energy for much else. But what, if not basic food, shelter, and survival, was humanity so preoccupied with before the Industrial Revolution?

As Steve Horwitz argues in a preview of his forthcoming book, Hayek’s Modern Family, our newfound liberty and accelerated activity in the Economy of Creative Service has actually freed us to devote more to other spheres of stewardship, not less:

Prof. Harry Veryser stars in a new video from ISI that explores some of the lessons about private property, rights, responsibilities, and stewardship that can be gleaned from the thought of Thomas Aquinas.

For a much more in-depth exposition of the connections between and lessons from Aristotle, Augustine, and Aquinas, check out John Mueller’s Redeeming Economics (ISI, 2010). For more, check out a slate of review essays on Mueller’s book published in Research in the History of Economic Thought & Methodology, including a piece by me, “The Economies of Divine and Human Love.”

walmart-lowwagesAs Elise pointed out earlier today, economist Donald Boudreaux completely eviscerates former Labor Secretary Robert Reich’s call to raise the federal minimum wage to $15 an hour. As Boudreaux says, “Reich’s video is infected, from start to finish, with too many other errors to count.”

But Boudreaux also wrote a letter to Reich countering the economically ignorant (though increasingly popular!) claim that “we subsidize low wage employers” like Wal-Mart, McDonald’s, and almost every mom-and-pop business in America through government welfare programs such as food stamps, Medicaid, and housing assistance. As Boudreaux says to Reich:

fight forRobert Reich seems to be a smart man. He served under three presidents, and now is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley. His video (below) says raising the minimum wage is the right thing to do. Unfortunately, he gets it all wrong.

Donald Boudreaux of the Cato Institute notes a couple of errors in Reich’s thinking. First,

Ignoring supply-and-demand analysis (which depicts the correct common-sense understanding that the higher the minimum wage, the lower is the quantity of unskilled workers that firms can profitably employ), Reich asserts that a higher minimum wage enables workers to spend more money on consumer goods which, in turn, prompts employers to hire more workers.  Reich apparently believes that his ability to describe and draw such a “virtuous circle” of increased spending and hiring is reason enough to dismiss the concerns of “scare-mongers” (his term) who worry that raising the price of unskilled labor makes such labor less attractive to employers.


witherspoonIn the spring of 1776, John Witherspoon preached his first sermon on political matters, about a month before he was elected to the Continental Congress. The sermon, “The Dominion of Providence Over the Passions of Men,” is a fascinating exploration of how God can work through human crises, and how even the “wrath of man” can lead us to glorify God in unexpected ways.

Surrounded by the conflict of the Revolution, Witherspoon calls on his countrymen to “return to duty,” neither letting blind rage get the best of them, nor retreating out of fear or for idols of security and “peace.” Yet while all this is directed specifically to the crisis of his time, I’m struck by how far his wisdom actually applies.

In today’s context, our conflicts vary, from economic woes to fights about religious liberty to racial tensions to terrorist threats to brazen abuses of power and authority within the halls of our own government. In each area, we can benefit from Witherspoon’s advice, learning to “hearken the rod” when times get tough, not only in terms of our own salvation, but for the sake and the cause of a free and virtuous society. (more…)

Blog author: jsunde
Wednesday, May 6, 2015

00979473.JPGI recently gave a hearty cheer for bringing back childhood chores, which are shockingly absent in a majority of today’s homes. The same appears to be the case with summer work for teenagers, which is increasingly avoided due to sports activities, cushy internships, video games, clubs and camps, and, in many cases, a lack of employment prospects altogether.

In an article for the Wall Street Journal, Dave Shiflett explores the implications of this development, recalling the “grit and glory of traditional summer work, which taught generations of teenagers important lessons about life, labor and even their place in the universe.”

Whether it was newspaper delivery, construction, factory work, fast food, or manual labor on the farm or the railroad, such jobs have introduced countless kids to responsibility, creativity, and service, helping connect the dots between God-given gifts and the broader social order. (more…)

factory-workers1When faced with work that feels more like drudgery and toil than collaborative creative service, we are often encouraged to inject our situation with meaning, rather than recognize the inherent value and purpose in the work itself.

In Economic Shalom, Acton’s Reformed primer on faith, work, and economics, John Bolt reminds us that, when enduring through these seasons, we mustn’t get too concerned about temporal circumstances or humanistic notions of meaning and destiny. “As we contemplate our calling, we will not simply consider the current job market,” he writes, “but ask ourselves first-order questions about who we are, why we are here, how God has gifted us, and how we can best serve his purposes.”

This involves reexamining what our work actually is and who it ultimately serves. But it also involves fully understanding God’s design for humanity in the broader created order. As we harness the gifts and resources that God has given us, it is crucial that we understand the source and aims of our toil, and the obligation and responsibility that comes with our authority. (more…)

greece for saleGreece has had to deal with a very uncertain economic outlook over the past decade or so, but now it’s getting downright ugly. Greece owes over $1 billion this month in debt repayments, along with pensions, government salaries and other obligations. They likely don’t have the money.

The rapidly deteriorating Greek economy makes its already daunting debt pile even harder to manage, a key point of contention between Athens and its lenders. The [European Commission’s] latest forecast reckons that Greece’s debt will reach a whopping 180% of GDP this year, much higher than expected in recent months. Greece’s most recent bailout agreement called for its debt-to-GDP ratio to fall to 110% by 2022, which looks nearly impossible without some sort of restructuring, write-down, or default.


comix-experienceWhat would you do if you hated independent bookstores? Maybe you work for or a bookseller shot your dad or you just want people to read less. For whatever reason, you want to see small businesses that sell books go out of business. What should you do to help destroy your local bookstore?

As San Francisco is finding out, the best strategy for destroying small booksellers is to simply raise the minimum wage.

In November, 77 percent of voters approved San Francisco’s Proposition J, which will raise the minimum wage in the city to $15 by 2018. But the ramifications of that vote are already being felt. A few months ago San Francisco’s best-known science-fiction bookstore, Borderlands Books, published the following on its website:

closedSeattle has now mandated an increase in minimum wage. The economic ramifications are being felt, especially throughout the restaurant industry.

Several Seattle restaurants have done away with tipping, but are adding a mandatory service charge on a customer’s bill.

Restaurants often operate on thin margins, so higher wages quickly impact profitability. As opposed to tips, a service charge becomes part of the restaurant’s overall revenue. The restaurateurs say the service charge component will be used exclusively for employee wages, benefits and payroll expenses.

While this may solve the economic issue for some restaurants, the mandatory minimum wage increase is causing others to simply close their doors. (more…)