Category: Business and Society

Blog author: jcarter
posted by on Friday, December 20, 2013

[Note: A version of this article ran last year around Christmastime. I'm posting it again because I love talking about Frank Capra and everyone else seems to love talking about Ayn Rand.]

Frank Capra and Ayn Rand are two names not often mentioned together. Yet the cheery director of Capra-corn and the dour novelist who created Objectivism have more in common than you might imagine. Both were immigrants who made their names in Hollywood. Both were screenwriters and employees of the film studio RKO Pictures. And during the last half of the 1940s, both created works of enduring cult appeal, Capra with his film It’s a Wonderful Life and Rand with her novel The Fountainhead.

The pair also created two of the most memorable characters in modern pop culture: Howard Roark and George Bailey. To anyone familiar with both works, it would seem the two characters could not be more different. Unexpected similarities emerge, however, when one considers that Roark and Bailey are variations on a common archetype that has captured the American imagination for decades.

Howard Roark, the protagonist of Rand’s book, is an idealistic young architect who chooses to struggle in obscurity rather than compromise his artistic and personal vision by conforming to the needs and demands of the community. In contrast, George Bailey, the hero of Capra’s film, is an idealistic young would-be architect who struggles in obscurity because he has chosen to conform to the needs and demands of the community rather than fulfill his artistic and personal vision. Howard Roark is essentially what George Bailey might have become had he left for college rather than stayed in his hometown of Bedford Falls.
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Blog author: jballor
posted by on Friday, December 20, 2013

Newburgh, ME Piper Mountain Christmas tree farm1

A couple of further points in reply to Micah Mattix’s response on buying Christmas trees, based on his original post here.

1) I think Mattix’s characterization of the buyer as “selfish” goes a bit too far, and is not an accurate characterization of a good deal of market activity. “Self-interested” would be more accurate, and would allow for selfish actors, but would also allow more generally for benevolent actors. For instance, a nun who runs an orphanage has decided that her wards need spiritual as well as material sustenance, and has allotted a portion of the budget to purchase a live Christmas tree. But for every dollar she spends on the tree, one less bowl of gruel will be served. Is she acting selfishly if she gets the best deal on a tree that she can get? She may not be regarding the interests of the seller on the same level as her own (which include the interests of her wards), but it seems to bias the discussion too much to simply describe all the players involved as necessarily selfish. The same would apply mutatis mutandis to the father providing a tree for his family. In fact, buying a Christmas tree is usually a pretty unselfish activity.

2) Related to the above point, and developing it a bit further, certainly the buyer ought view the seller as someone to whom he or she has moral obligations. But to expect the seller to haggle up seems wrong. Perhaps the seller is perpetuating injustice by simply trying to sell trees even at a loss. Perhaps like the poet in Frost’s work they would be better off doing something else with them besides dumping. But they key here is that the buyer and the seller are in the best position to judge for themselves. It should also be noted that the tree seller isn’t just selling a single tree. Earlier sales of higher priced trees may subsidize and offset the costs of selling later trees at a discount. Mattix largely seems to want to argue for conscientious consumption, and I am all in favor of that. Let your conscience be your guide, and let your conscience be informed. But all too often things move beyond this to legislation of some kind of baseline. I realize that Mattix is not arguing for this, but the dangers of a mandated price floor for Christmas trees should be apparent.

3) We do agree “that a market economy is a good system that takes into consideration certain truths about human nature” and we also agree, as Mattix concludes, “that as a buyer price should always be the only determining factor.” I am certainly not defending an ideal of perfect prices. Prices are not perfect, and they are not sacrosanct. But they are often the best device we have for sorting out all of the complex realities that lie behind market transactions. The dynamic of this issue shares similarities with the disputes over fast food as well as, more broadly, the debates over fair trade. Here’s how Victor Claar sums things up, and I’ll close with this thought: “If you purchase ‘fair trade,’ buy it because you like the good or the service. Do not do it out of mere charity. Instead, give generously to charities that you know are effectively working for human rights, development of human and physical capital, and opportunities for the poor to discover increasingly valuable ways to serve others in the global marketplace.” Otherwise you might just be helping perpetuate the poverty-trap of Christmas tree sales.

Concepts you should know about explained in five minutes (or less).

Leo Linbeck III, President and CEO of Aquinas Companies, provides an explanation of competitive federalism and how competition and governance relate in society.

See also:

5 Minute Explainer: Subsidiarity

351px-Ballot1_227c8The phrase “Separation of Church and State” is not in the language of the First Amendment, and the concept was not favored by any influential framer at the time the Bill of Rights was drafted. So how did it become part of the jurisprudence surrounding the First Amendment?

As Jim Lindgren, a law professor at Northwestern, explains, the Ku Klux Klan had something to do with it . . .

7. The first mainstream figures to favor separation after the first amendment was adopted were Jefferson supporters in the 1800 election, who were trying to silence Northern clergy critical of the immoral Jeffersonian slaveholders in the South.

8. After the Civil War, liberal Republicans proposed a constitutional amendment to add separation of church and state to the US Constitution by amendment, since it was not already there. After that effort failed, influential people began arguing that it was (magically) in the first amendment.

9. In the last part of the 19th century and the first half of the 20th century, nativists (including the KKK) popularized separation as an American constitutional principle, eventually leading to a near consensus supporting some form of separation.

10. Separation was a crucial part of the KKK’s jurisprudential agenda. It was included in the Klansman’s Creed (or was it the Klansman’s Kreed?). Before he joined the Court, Justice Black was head of new members for the largest Klan cell in the South. New members of the KKK had to pledge their allegiance to the “eternal separation of Church and State.” In 1947, Black was the author of Everson, the first Supreme Court case to hold that the first amendment’s establishment clause requires separation of church & state. The suit in Everson was brought by an organization that at various times had ties to the KKK.

11. Until this term, the justices were moving away from the separation metaphor, often failing to mention it except in the titles of cited law review articles, but in the last term of the Court they fell back to using it again.

Read more . . .

teamstersRight to Work laws are state laws that guarantee a person cannot be compelled to join or pay dues to a labor union as a condition of employment. Hearing that definition, you’re probably saying to yourself, “Right to work laws sound a lot like slavery.”

What’s that? That’s not at all what you were thinking? Well, you must not work for Detroit-based Teamsters Local 214:

A Michigan union invoked the provision of the state constitution that bans slavery in their argument against right-to-work, court documents show.

Teamsters Local No. 214 stated Dec. 6 that right-to-work was “a violation of the prohibitions against involuntary servitude” because members of the union had to work against their will on behalf of non-union members. The union then referred to Article I, Section 9 of the state constitution, which states: “Neither slavery, nor involuntary servitude unless for the punishment of crime, shall ever be tolerated in this state.”

The claim was made in response to a lawsuit filed by four city of Dearborn employees who were going to be charged $150 by the union for any grievance they filed after they left the union when they exercised their rights under state law.

What the Teamsters failed to mention is that the reason non-union workers get the same benefits as unions members is because they previously asked for, and received, permission from the federal government to exclusively represent all employees in a workplace where a union exists.
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Blog author: dpahman
posted by on Friday, December 13, 2013

Today at Ethika Politika, I look at the busyness of the Advent season through the lens of Orthodox Christian asceticism in my essay, “Busyness and Askesis: An Advent Reflection.”

The Advent season in the United States is typically ransacked by shopping, parties, visits with family, and the like. Perhaps worst of all, it can seem impossible to avoid the bombardment of holiday and Christmas-themed advertisement. People work overtime in order to earn a little extra to buy gifts for friends and family (and themselves). The ethos of the season can seem to be emite et labora, buy and work. Nevertheless, I would hesitate to affirm the understandably natural, knee-jerk condemnation of busyness as such.

Drawing upon the story of “difficult Father Nathaniel” from the recent Russian bestseller, Everyday Saints and Other Stories by Archimandrite Tikhon, I describe how, though busyness can be a spiritual distraction, “sometimes busyness itself can be askesis.”

I write,

Busyness can be the adversary of Advent, but it need not be. Instead, the Advent season can be a time for us to examine and practice how our busyness itself can be transfigured by the life of the Church, how our worldly work also may be liturgical labor, how when transfigured by the kingdom of God our busyness can also serve the common good.

The story of difficult Father Nathaniel, however, is worth visiting in further detail here as well. Hand in hand with complaints about the busyness of the season come complaints about the business of the season. (more…)

TCC Banner

Dan Clements, an American student studying at the University of Leuven, and I help greet conference attendees

Last week, an exciting new organization called the Transatlantic Christian Council (TCC) hosted its inaugural conference. The theme of the conference was “Sustaining Freedom”, which aligns well with the Council’s mission “to develop a transatlantic public policy network of European and North American Christians and conservatives in order to promote the civic good, as understood within the Judeo-Christian tradition on which our societies are largely based.”

What I find most exciting about this Council, for which I commend Todd Huizinga and Henk Jan van Schothorst on their vision and initiative in founding, is this: like the Acton Institute, the TCC is not exclusively devoted to just one aspect of life, but rather aims to provide a forum for conversation on a broad range of life’s many important and fundamental human questions.

The starting point for these conversations is with a basic concept of human dignity. This concept is rooted in an openness to the idea of man as an image of God — endowed with the capacities for willfulness and reason, a creature and a sub-creator. And it is this understanding of the human person that serves as a point of departure for working through all sorts of interesting questions of politics, economics, liberty, government, religion, and family.

When I mentioned to a friend that I would be travelling to Belgium for this conference, he said to me: “Be sure they don’t euthanize you and harvest your organs!”

“Well,” I thought to myself, “that’s certainly a novel way to wish someone a good trip.”
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burritoBusiness, we are told, is supposed to have a conscience to survive. For instance, Chad Brooks at Fox Business says that businesses have to be “socially conscience” in order to attract customers:

Young consumers consider social responsibility most when shelling out big bucks for products such as automobiles, computers, consumer electronics and jewelry, the study found. Specifically, more than 40 percent of consumers under 30 consider social issues when buying a big-ticket item, compared to just 34 percent who factor in those issues when buying everyday items, like gasoline and food.

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Blog author: jballor
posted by on Wednesday, December 11, 2013

Broken bank 02In yesterday’s edition of The Transom, which I highly recommend, Ben Domenech included a discussion that places the debates over raising the minimum wage within the broader context of the effects of inflation more generally.

Here’s a section:

There shouldn’t be any debate about the reality of the problem that the costs of basic staples, health care, and higher education are chewing up ever-increasing portions of the median family budget which is, in inflation-adjusted terms, smaller than it’s been since 1995. According to the Bureau of Labor Statistics, over the past five years, the average prices for all goods are 7.7% higher; the average price of bread is 10.4% higher; and the average price of meat/poultry/fish/eggs is 16.2% higher. In the past decade, the average worker has paid 89 percent more toward their health care benefits, while their wages grew 31 percent. The rising costs of the government-fueled higher education bubble makes American parents concerned they can no longer afford to send their kids to college. On top of it all, Americans no longer feel confident about their ability to find a new job which can pay them enough to make up for the costs of these goods and services.

The problem is not that the cost of unskilled labor is too low. The problem is the costs of what workers can buy with the fruits of that labor are too high. And the reason for that is largely due to government and systems which socialize risk and insulate producers from reality, not the realities of a competitive marketplace. http://vlt.tc/16×9 Those who favor a free market response to these inequality-related concerns ought to view the minimum wage push as an opportunity to put forward an agenda that speaks to these real concerns with a gas & groceries agenda. This is not going to be solved by more government requirements which raise the cost of labor and will absolutely lead to more low-skilled unemployment: it is with an agenda that would smash the insulated systems which have led to these higher costs.

Ben goes on to outline in some detail what an agenda might look like, which includes “ending the government’s management Soviet-style programs of dairy and raisins.” Horror of horrors, the Daily Beast and dairy producers would have us believe that the result would be $8/gallon milk. I can’t be the only one who wonders what the market price of commodities from milk to oil and sugar might be without various protectionist measures and subsidy schemes.

Ben ends the section with a key question: “Some Republicans have taken up more populist anti-corporatist and anti-cronyist arguments in recent months, because they can read the same polls we do. But will they stand up to cronyism, or are they just interested in demagoguery on the issue until they hold the reins of power again?”
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caremergencyYesterday I began a series of posts which attempts to explain why the working poor tend to make terrible financial decisions and how they think about money differently than other economic classes. In my initial post I wrote,

Imagine that instead of having to deal with consumption smoothing decisions, at most, several times a year, you had to deal with them several times a month, or even several times a week. Now also imagine there is no workable solution that will actually smooth the short-term consumption problem and the best that you can hoped for is a temporary fix that delays having to deal with the issue.
That is what it’s like to be the working poor.

Several people have asked me to explain more what I meant, so before moving on I wanted to provide a more in depth example.

Let’s again begin by looking at the decision-making process of the middle-class. Imagine that you want to buy a home. Your household income is $51,404 a year (the median household income in the U.S.) and the house you’re interested in is on the market for $152,000 (the avg. home price in the U.S.). At what point do you buy the house?

There are several ways the average American may answer, but the one response you will almost never hear is, “You should buy the house only after you’ve saved the $152,000 needed to pay for it.”

While most people would agree that it would be prudent to apply a down payment, the idea that you’d pay the entire amount at once – even if you had $152,000 in cash – would strike most people as peculiar if not absurd. Instead, we borrow money for a mortgage that will allow us to pay a set amount each month for 15 to 30 years. Because we are willing to spread our payments out into the future we will pay a lot more than the $152,000 (at 5% for 30 years, the total would be $293,748.79). But we consider that a reasonable accommodation for getting what we want right now.

That is an example of how most of us take the concept of consumption smoothing for granted.
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