I recently asked the question at Ethika Politika, “Which Capitalism?” (also the title of my article), and I followed it up with a related question here regarding the relationship between distributism and capitalism (is the former a form of the latter?). In addition, Jordan Ballor reflected last week on the different orientation of definitions of capitalism and socialism, observing, “One definition [i.e. capitalism] is focused on structure, the other [i.e. socialism] is connected with moral ideals.”

Read more on On the Importance of Definitions…

G. K. Chesterton
(one of the founding fathers of distributism)

Today at Ethika Politika, in response to a few writers who have offered, in my estimate, less-than-charitable characterizations of capitalism, I ask the question, “Which Capitalism?” (also the title of my article). I ask this in seriousness, because often the free economy that people bemoan bears little resemblance to the one that many Christians support. In particular, I ask, “Which Capitalism?” in reference to the following from Pope John Paul II, who outlines in his encyclical Centesimus Annus (no. 42) two different forms of capitalism as follows:

The first is “an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector” that “is the victorious social system” since the fall of the Soviet Union and that “should be the goal of the countries now making efforts to rebuild their economy and society.” The second is “a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality, and which sees it as a particular aspect of that freedom, the core of which is ethical and religious.”

All three of the authors I take issue with are Roman Catholic and two of them have voiced their support for distributism as an alternative to capitalism. However, I ask with all sincerity, “[S]hould not distributists be asking whether distributism is a form of capitalism, rather than setting it up as an alternative to capitalism?” Given the high praise given by Pope John Paul II to capitalism, rightly understood as the free economy, ought not distributists simply be arguing that they, perhaps, have some valuable insights for supporters of capitalism, rather than opposing distributism to capitalism, uncharitably understood? Read more on Is Distributism a Form of Capitalism?…

Solidarity designed by Thibault Geoffroy, from The Noun Project

When I moved to west Michigan, one of the things that struck me the most were distinct cultural differences between the different sides of the state. While I was pursuing a master’s degree at Calvin Theological Seminary, I worked for a while in the receiving department at Bissell, Inc. I remember being surprised, nay, shocked, that a manufacturer like Bissell was not a union shop. (All those jobs are somewhere else now, in any case.)

Before attending Michigan State as an undergrad, I had lived in Detroit, and although I never had a union job myself, the cultural expectations of organized labor were (and still are) deeply ingrained on the east side of the state. My dad is a longtime editor at a suburban newspaper, and one of the reasons he still has a job amid the economic downturn and the upheavals facing that industry is his membership in the guild.

But things really are different on this side of the state. That’s one reason why the protests taking place today in Lansing, the centrally-located state capital, are symbolic of two sides of the state, in many ways divided by culture, economy, and politics. As to the latter, consider some statewide candidates for public office in recent memory that haven’t done so well when trying to move beyond west Michigan, including Pete Hoekstra, Dick DeVos, Dick Posthumus. The fight over Right to Work legislation in Michigan is, in this way, a tale of two Michigans.

It is also a tale about two paths forward for Michigan, though. On the one side is the state’s historic identification with Big Labor and the Big Three. On the other side is a Michigan that embraces enterprising innovation and entrepreneurial competition.

The Wall Street Journal editorialized yesterday on this topic (HT: Ross Emmett), and captures the essence of the choice facing Michigan: “Unions loathe right to work because they know that many workers would rather not join a union.”

I think that the right to organize and therefore unions are fundamental to flourishing societies. But what concerns me is that the argument against Right to Work is not about this fundamental right to organize, but rather about protecting the entrenched and embedded political interests of a particular kind of union.

There is a world of difference between voluntary union membership and mandatory, government-enforced, union membership. If the former is akin to something like the freedom of religion, then the latter is more like the government establishment of a particular religion or church. What we need is the separation of Union and State in the way that we have historically had free churches. We need to disestablish labor in the same way that we have disestablished religion in America, while simultaneously protecting the right to organize and join a union as well as the right to worship and express our religious convictions.
Read more on The Separation of Union and State…

Pin not actual size.

I commented last week on the “textbook bubble” (here) and have commented in the past on the “higher-ed bubble” and the character of American education more generally (see here, here, and here). To briefly summarize, over the last few decades the quality of higher education has diminished while the cost and the number of people receiving college degrees has increased. The cost is being paid for, in large part, through government subsidized loans. But with the drop in quality and increase in quantity, a college degree is not as impressive as it used to be; in many cases it no longer signals to employers what it used to. When a critical mass of those loans goes into default, we will have another housing-bubble-esque crisis on our hands. At the same time, government loans, which are largely indiscriminate with regard to the risk of the applicant and guaranteed on the backs of taxpayers, have incentivized colleges and universities to raise the costs to students for the sake of increased expenditures, inflating the bubble even more. Now, Alex Williams of The New Times reports last Friday,

The idea that a college diploma is an all-but-mandatory ticket to a successful career is showing fissures. Feeling squeezed by a sagging job market and mounting student debt, a groundswell of university-age heretics are pledging allegiance to new groups like UnCollege, dedicated to “hacking” higher education. Inspired by billionaire role models, and empowered by online college courses, they consider themselves a D.I.Y. vanguard, committed to changing the perception of dropping out from a personal failure to a sensible option, at least for a certain breed of risk-embracing maverick.

An increasing number of students are realizing that they, to quote Good Will Hunting, do not want to be $150,000 in debt for an education that they could have gotten “for a $1.50 in late charges at the public library.” Read more on The Pin that Might Pop the Higher-Ed Bubble…

Is spartan austerity driving us over the fiscal cliff?

The latest step in the budget dance between House Republicans and the White House has to do with where tax increases (or revenue increases in general, depending on what is called what) fit with a deal to avoid the so-called “fiscal cliff.” As Napp Nazworth reports, President Obama has apparently delivered an ultimatum: “there would be no agreement to avert the ‘fiscal cliff’ unless tax rates are increased on those making more than $250,000 per year.”

On one level it seems reasonable to talk about addressing a deficit from both directions: cutting spending and raising revenue. But as Ray Nothstine put it so well earlier this week, without some structural (and cultural) changes to the way Congress works, it would be insane to think that giving politicians more money is going to change how they spend it. One definition of insanity is doing the same thing over and over again and expecting a different result. Historically “politicians spend the money as fast as it comes in – and a little bit more.” Without some kind of balanced budget agreement, something with real teeth, why should we think things will be any different this time around? (I’ve talked about a more promising “both/and” budget solution before.) As Ray and I have concluded elsewhere, “In the case of the federal spending, the government has proved to be untrustworthy with very much. It’s time to see if the politicians in Washington can learn to be trustworthy with less.”
Read more on Spartan Austerity and the Fiscal Cliff…

According to AEI author Mark Perry, there is another education-related “bubble” to worry about: the textbook bubble. He writes that this textbook bubble “continues to inflate at rates that make the U.S. housing bubble seem relatively inconsequential by comparison.” He continues, “The cost of college textbooks has been rising at almost twice the rate of general CPI inflation for at least the last thirty years.” Given that many students use loan money to purchase books as well as pay for classes, we might think of this as one of the many sources pumping air into the student debt bubble. But what choice do students (or professors, for that matter) have than to surrender to the textbook “cartel,” as Perry characterizes it? This bubble popping, while a bad thing for the textbook bubble-boys committed to the old, cartel-style model, could be a small relief and contribute to slowing the growth rate of the student debt bubble. Read more on Textbook Bubble-Boys…

The estimable Mollie Hemingway has a post up at Ricochet that examines the curious spillover of Black Friday into Thanksgiving Thursday. She writes, “Do Target executives have the right to make employees leave their families to open stores on days when they’ll be home with their families? Of course they do. Should they? Of course not!” Her concern is “that some people are so addicted to shopping that they can’t even take three days off a year.” I think she’s right to conclude that “if you are in any way inclined to shop on Thanksgiving instead of waiting a day for your fix, consider seeking help.”

About this time last year I wrote a piece on this phenomenon, in which I argued that consumers ought to realize the implications of their spending choices: “A variety of polls have shown that the public generally thinks that stores should be closed on Thanksgiving, but they may not always recognize what their shopping habits require of retailers. Shoppers need to realize that they cannot have it both ways. Our decisions have real consequences for the lives of those who work in retail and a host of other industries.”
Read more on Black Friday and Thanksgiving Thursday…

In the Autumn 2012 issue of Response, Jeff Van Duzer, wrote an article entitled, “Does Business Matter To God,” on the issue of faith and work. He is a well-respected professor of business law and ethics at Seattle Pacific University who gives a unique look into the role faith plays in business. This entire issue of Response is dedicated to the topics of faith and work. I will write about a few other noteworthy articles over the coming weeks.

Van Duzer starts the article by recounting a conversation he had with his father on the purpose of business. In the middle of his attempt to explain his view on the matter, his dad interrupted him and said:

Jeff, everyone knows what the purpose of business is. The purpose of business is to make money.

Read more on Business, Profits, and Faith…

Working Paper: “The Eurozone Debt Crisis — The Options Now”
Buchheit, Lee C. and Gulati, G. Mitu
SSRN Working Papers, October 8, 2012

The Eurozone debt crisis is entering its third year. The original objective of the official sector’s response to the crisis — containment — has failed. All of the countries of peripheral Europe are now in play; three of them (Greece, Ireland and Portugal) operate under full official sector bailout programs.

Read more on ResearchLinks – 10.19.12…

Bill Gates, easily one of the richest men in the world, recently talked about his wealth and his children’s inheritance, philanthropy and taxes in an article in the the UK’s The Telegraph.

Read more on Bill Gates: ‘Capitalism has worked phenomenally’…