Category: General

Acton’s director of research Samuel Gregg has a piece over at The American Spectator that may surprise big government liberals. (We know you read this blog.) In “Free Market Sweden, Social Democratic America,” he lays out the history of Sweden’s social democracy — its nature and its effects on the country’s economy — and then draws lessons for the United States. The Scandinavian country isn’t quite the pinko nanny state Americans like to look down upon, and we’ve missed their reforms of the last two decades.

Gregg explains that Sweden’s dramatic mid-century expansions of government were portrayed as rooted in the traditional values of the homeland, so Social Democrat governments escaped the soft-Marxism tag, and were able to do pretty much as they pleased. Social programs were also characterized as coverage of universal rights, to be imposed by general taxation. Then came

the decision of governments in the 1970s to hasten Sweden’s long march towards the Social Democratic nirvana. This included expanding welfare programs, nationalizing many industries, expanding and deepening regulation, and — of course — increasing taxation to punitive levels to pay for it all.

Over the next twenty years, the Swedish dream turned decidedly nightmarish. The Swedish parliamentarian Johnny Munkhammar points out that “In 1970, Sweden had the world’s fourth-highest GDP per capita. By 1990, it had fallen 13 positions. In those 20 years, real wages inSweden increased by only one percentage point.” So much for helping “the workers.”

Economic reality was painful, but Sweden responded, and began to unravel some of its “progress,” reducing the public sector and even allowing private retirement savings. Unemployment was still high though — about 20 percent — in large part because the country’s tax structure encouraged joblessness.

But with a non-Social Democrat coalition government’s election in 2006, Sweden’s reform agenda resumed. On the revenue side, property taxes were scaled back. Income-tax credits allowing larger numbers of middle and lower-income people to keep more of their incomes were introduced.

To be fair, the path to tax reform was paved here by the Social Democrats. In 2005, they simply abolished — yes, that’s right, abolished — inheritance taxes.

But liberalization wasn’t limited to taxation. Sweden’s new government accelerated privatizations of once-state owned businesses. It also permitted private providers to enter the healthcare market, thereby introducing competition into what had been one of the world’s most socialized medical systems. Industries such as taxis and trains were deregulated. State education and electricity monopolies were ended by the introduction of private competition. Even Swedish agricultural prices are now determined by the market. Finally, unemployment benefits were reformed so that the longer most people stayed on benefits, the less they received.

By 2010, Sweden’s public debt had fallen dramatically and its rate of economic growth was 5.5 percent. Compare that with America’s 2.7 percent growth in 2010, and just try to restrain your jealous impulses.

Gregg cautions that Sweden’s economy is still hampered the Social Democrats’ legacy. High minimum wages keep a full quarter of the country’s youth unemployed, and a carbon tithe to the religion of environmentalism retards growth, but

It’s surely paradoxical — and tragic — that a small Nordic country which remains a byword for its (at times obsessive) commitment to egalitarianism has proved far more willing than America to give economic liberty a chance.

Full article here.

Billionaire Democrat Ted Leonsis wrote a posting titled “Class Warfare – Yuck!” on his blog yesterday, in which he implored the president, to whose campaign he donated the maximum amount: “Hit a reset button ASAP. Rethink how to talk to businesses and sell business leaders on your plan to make America great! Many of us want to be a part of the solution. We aren’t the problem.”

Today, Charles Schwab published an opinion piece in the Wall Street Journal, and again the title says it all: “Every Job Requires an Entrepreneur.” If there is to be an economic recovery, he says,

The leaders of both parties, Republicans and Democrats alike, must lend their voices to encourage and support private enterprise, both for what it can do to turn our economy around and for the spirit of opportunity it represents.

These two men are individually responsible for the creation of hundreds of thousands of jobs because of the innovations they brought to the internet (AOL) and to stock brokerage (Charles Schwab Corp.). And their businesses have done more than employ lots of people; they have lowered the cost of internet access and financial services for millions of Americans. These men have done immense good for “less fortunate Americans,” and Ted Leonsis feels insulted by corporate jet demagoguery,

I own 50 hours on NetJets for the rare occasion I do travel by private plane. Does Air Force One charter out? Stop making private planes an issue. This is a tiny issue for us to deal with for our country.

Trying to shackle investment and entrepreneurial activity does the unemployed no good (nor our national debt). And no rhetorical strategy could be more opposed to the Christian principle of solidarity than the vilifying of successful entrepreneurs — the effects of such a strategy on public morality should be immediately obvious.

The corporate jet talking point is meant to stir envy in the hearts of listeners — it’s a trifling proposal that packs maximum rhetorical punch — and government by envy will get you nowhere.

Roger Scruton has written an excellent piece on the moral basis of free markets; it’s up at MercatorNet. He begins with the Islamic proscriptions of interest charged, insurance, and other trade in unreal things:

Of course, an economy without interest, insurance, limited liability or the trade in debts would be a very different thing from the world economy today. It would be slow-moving, restricted, and comparatively impoverished. But that’s not the point: the economy proposed by the Prophet was not justified on economic grounds, but on moral grounds, as an economy of righteous conduct.

Our long-term economic malaise may mystify world leaders, but Scruton sees its causes clearly: ways intended to speed economic development have become ways to acquire luxuries without payment; we have confused trade in debts with others’ assumption of our debts. This moral confusion is as much to be found in governments as it is in private markets, because the incentives are exactly the same — anyone who denies it is lying.

If you borrow money you are obliged to repay it. And you should repay it by earning the sum required, and not by borrowing again, and then again, and then again. For some reason, when it comes to the state and its clients, those elementary moral truths are forgotten.

Scruton concludes that morality is inescapable — though we may delay it, judgment will come.

The moral sense emerged in human beings precisely because it has proved to be, in the long run, for their advantage. It is the thing that puts a brake on reckless behaviour, which returns the cost of mistakes to the one who makes them, and which expels cheating from the fold. It hurts to be punished, and states that act wrongly naturally try to avoid the punishment. And since they can pass on their hurt so easily to the rest of us, we turn a blind eye to their behaviour. But I cannot help thinking that the result is at best only a short term economic advantage, and that the long term costs will be all the greater. For what we are seeing, in both Europe andAmerica, is a demoralisation of the economic life. Debts are no longer regarded as obligations to be met, but as assets to be traded. And the cost of them is being passed to future generations, in other words to our children, to whom we owe protection and who will rightly despise us for stealing what is theirs.

Read the full text here.

Acton Research Fellow Dr. Anthony Bradley spoke about his book Black and Tired: Essays on Race, Politics, Culture, and International Development at The Heritage Foundation earlier this month, and the video is now online.

Dr. Bradley explained just why he called his book “Black and Tired:”

The hopes and dreams, aspirations, virtues, institutions, values, principles that created the conditions that put me here today, are being sabotaged and eroded by those who have good intentions, but often do not think through the consequences of public policy decisions, because they have different views on the human person, and human dignity, then those who actually structured our government in the first place. And while the effects of this anthropology are not immediately seen, the long-term effects have been uniquely and harshly experience among a black underclass, and this makes me tired.

Dr. Bradley blames a “poisonous cocktail” of converging trends that has allowed a class of political elites to sabotage and erode the American spirit. He blames the decline of American religious life, the erosion of an understanding of human dignity, and concern with equality of results rather than equality of process. These trends are symptomatic of a pervasive narcissism, says Dr. Bradley, that sets them off and is then fed by them.

The black community needs an ethical rebirth — as Dr. Bradley says, “moral problems require moral solutions” — in order to escape the fatal “patriarchy of good intentions.” His book provides lessons for a recovery of black culture and a return to moral responsibility. He reminds the audience,

The Civil Rights Movement at its core was about … liberating African Americans from the control of others who sought to make their decisions for them, as if they were children. So during the civil rights movement you saw men carrying placards that read “I AM A MAN” — I’m not a boy.

For how to turn things around, to turn out men instead of boys, read Dr. Bradley’s book. Here’s the full video:

In this week’s Acton Commentary, “Solyndra and the False Hope of Green Jobs” I look at the original problem with federally funded Green Jobs. The Solyndra debacle has been called a “microcosm of Obamanomics,” an example of what always happens when the Federal Government starts handing out $500 million checks. That’s true, but it’s a microcosm of something more — of an economy that’s lost it’s understanding of vocation. We stumble around trying to “create jobs” by Congressional action without really knowing what a job is.

A concern for jobs, simply, is dangerous. The dignity of a man’s employment does not come from his salary per se. Rather, it comes from his nature — man is called to work, to till the soil, from the very beginning, and the nobility of his labor is wrapped up in both the activity itself and in its ends. It does not befit a man to do work that is of no consequence.

Sadly, in the rush to “create jobs” by government stimulus, little thought is given to what work really is, or how more of it can be created. It is considered enough that a job run from nine in the morning till five in the afternoon, and that it come with a regular paycheck.

The green jobs movement is especially guilty of this unthinking attitude — indeed, it has never been defined what a green job is, and various bodies give widely varying definitions. If it’s not known broadly what a green job is, it won’t be possible to know whether all green jobs are compatible with the dignity of human labor, and whether governments are really capable of spurring their creation.

The now ubiquitous pictures of the president’s visit to Solyndra last year perfectly illustrate our now-empty conception of work: it is the U.S. Government that now creates jobs, not the entrepreneur.

The risks taken within the free market by an entrepreneur are calculated to yield a profit. That profit is, as Pope John Paul II put it, “the result of the overall expansion of work and the wealth of society.” The entrepreneur must create meaningful jobs, or else face the consequences imposed by the market.

Governments, because of their coercive power, do not feel the consequences of failure. The Department of Energy is the entrepreneur’s antagonist: it has just taken $535 million and flushed it, over the course of two years, down the drain. The loss was unintentional, but predictable, and we should expect that it will happen again, because the department’s work as a regulatory body is to consume, not to produce—as long as it is pretended that a job is nothing more than a desk and a salary, “jobs” will be created at a loss.

No arm of the government can purchase jobs as commodities and promote the common good, because such a purchase commodifies the worker and strips him of the dignity of real work.

Full piece here.

Pope Benedict XVI warmly greeted a group of 23 Acton Institute staff and supporters on pilgrimage at his Castel Gandolfo summer palace this past Sunday, September 18.

During the traditional Sunday Angelus audience inside the papal summer palace courtyard, Benedict delivered an inspiring talk on Christ’s parable of the workers in the vineyard — a most appropriate Christian teaching upon which the Acton Institute often reflects and articulates during its economics seminars to religious students and business professionals throughout the world.

The Holy Father said:

I offer a warm welcome to the English-speaking pilgrims and visitors present at this Angelus prayer, including those from the Acton Institute … In this Sunday’s Gospel, we hear Jesus compare the Kingdom of Heaven to the actions of a landowner who is generous to all the workers in his vineyard. Perhaps at times we may feel envious of the success of others or feel that we have not been sufficiently thanked for our service. May we always strive to be humble servants of the Lord and rejoice when God bestows abundant graces on those around us. I wish you a good Sunday. May God bless all of you!

If you want to see a recorded video of the audience, click below:

Even though Ron Paul clarified himself at the Tea Party debate, and explained that he doesn’t think those who can’t afford medical care should be laid out on the curb to die, the Left went about painting his answer as morally abominable. Before we deal with their abuse of Christian doctrine, let’s see what Paul said:

I practiced medicine before we had Medicaid, in the early 1960s, when I got out of medical school. I practiced at Santa Rosa Hospital in San Antonio, and the churches took care of them. We never turned anybody away from the hospitals. And we’ve given up on this whole concept that we might take care of ourselves and assume responsibility for ourselves, our neighbors, our friends, our churches—would do it.

A great answer, it seems to me, and thoroughly Christian, unless you take the United Nations as an instantiation of the Gospel command to “love thy neighbor as thyself.” Liberals latch onto the Good Samaritan aspect of the commandment and think, if my neighbor, then why not the fellow two counties over, two states over, or two countries over?

Newsflash: prudence is a part of moral calculations.

The Good Samaritan was passing by the man who had been beaten and robbed, and was in a position to help him. But while residents of Alaska and Florida are each others’ neighbors in one sense, they cannot be of service to each other in the same way that they can those on their own streets. Moral considerations involve not only intention but also acts themselves, and whether they are likely to succeed (cf. Catholic just war principles).

Furthermore, the federal government might be practically able to assume some of the responsibilities of the Good Samaritan, but no one on the Christian Left has provided an argument why it should—why it would be better for two neighbors to love each other through the government, in some sort of progressive trinity. Otherwise, isn’t it best to let people practice love of neighbor themselves, so that they can store up treasure in Heaven?

Finally, most of the people making these arguments don’t think Congress should pass some sort of Obamacare law for the entire world, but that’s exactly where their thinking leads. Really why not preemptively cover any Martians without access to dental care and free contraception? Well because that would cost too much.