I have yet to read a moral argument for why the taxes collected from working men and women should be redistributed to businesses. It’s called “corporate welfare.” This is the odd state of affairs where, business owners compete for government funding rather than exclusively competing for customers in the marketplace. In fact, many of the biggest recipients of corporate welfare are the same businesses that hire high-priced lobbyists to help write laws in Congress that protect them from competition. Why, then, do voters turn a blind eye to corporate welfare?
I have recently accepted the honor of becoming a contributing editor at Ethika Politika, and I begin my contribution in that role today by launching a new channel (=magazine section): Via Vitae, “the way of life.” In my introductory article, “What Hath Athos to Do With New Jersey?” I summarize the goal of Via Vitae as follows:
Via Vitae seeks to explore this connection between the mystical and the mundane, liturgy and public life, the kingdom of God and the common good. While I value technical discussions of public policy and believe that the work of advocating for civil laws that reflect the law of God constitutes a true vocation, I see a lacuna in our discourse when it comes to the habits necessary to enable persons to live morally in the first place, however just or unjust the law itself may be. (more…)
Family, church, and school are the three basic people-forming institutions, notes Patrick Fagan, and they produce the best results—including economic and political ones—when they cooperate.
Even if all the market reforms of the Washington think tanks, the Wall Street Journal, and Forbes Magazine were enacted, we’d still need to kiss the Great American Economy goodbye. Below the level of economic policy lies a society that is producing fewer people capable of hard work, especially married men with children. As the retreat from marriage continues apace, there are fewer and fewer of these men, resulting in a slowly, permanently decelerating economy.
When men get married, their sense of responsibility and drive to provide gives them the incentive to work much harder. This translates into an average 27-percent increase in their productivity and income. With the retreat from marriage, instead of this “marriage premium,” we get more single men (who work the least), more cohabiting men (who work less than married men), and more divorced men (who fall between the singles and cohabiters).
All this is visible in the changing work patterns of our country, resulting in real macro-economic consequences. Fifty years ago family life and the economy were quite different.
“[He] belongs more in an insane asylum than at the head of a multinational corporation.”
That was the reaction by a French union official to an amusingly harsh letter by Maurice Taylor, chief executive of tire maker Titan. Taylor was initially interested in buying the French tire factory, which is facing closure following five years of unsuccessful negotiations with unions to enhance its competitiveness. However, after visiting the plant three times, he wrote a letter to France’s industry minister Arnaud Montebourg, saying: “Sir, you would like to open discussions with Titan. You think we’re that stupid?”
Taylor says the plant’s 1,173 workers “have one hour for their lunch, they talk for three hours and they work for three hours. I said this directly to their union leaders; they replied that’s the way it is in France.” The Titan CEO added:
“Titan has money and the know-how to produce tyres. What does the crazy union have? It has the French government. The French farmer wants cheap tyres. He doesn’t care if those tyres come from China or India and these governments are subsidising them. Your government doesn’t care either: ‘We’re French!’
Titan is going to buy a Chinese tyre company or an Indian one, pay less than one euro per hour wage and ship all the tyres France needs. You can keep the so-called workers.
My friend John Teevan of Grace College sends out a monthly newsletter, “Economic Prospect.” He passes along this in the current edition:
I found this note from a newly retired accountant (age 66) who has not gone on social security yet. His income as a part-time accountant in his town was $60,000.
“My income is $60,000 and my IRS taxes are 10,000, my FICA deduction is $8,000, my state income tax is $2500, and my property tax is $6000. So I pay a total of $26,500 in taxes leaving me $33,500.
However, I have additional costs that I would like to (but can’t) deduct from my income. As I watch ‘government accounting’ I realize that these should be considered real costs.
I have saved $200,000 and invested the money in bonds earning 1% ($2000).
I could have invested that money in CDs earning 5% (10,000), but as the Fed has lowered the interest rate the cost to me is the difference: $8000.
In addition I am now entitled to social security and at my level of income over the years I would have received $28,000 this year, but I have chosen not to take Social Security saving Uncle Sam that money.
So I have contributed a total of $36,000 to Uncle Sam in foregone interest and foregone Social Security payments. Who got the benefit of that $36,000?
Uncle Sam; not me.
So if I add up my total contributions to the government this past year I paid $26,500 in taxes and paid $36,000 in lost income. These two come to $62,500…more than the $60,000 I earned.
While I enjoy my new job, when I think about this, I start to feel like one of Pharaoh’s slaves toiling to roll immense stones up from the Nile to his pyramid.”
Send John a message if you’d like to be added to his “Economic Prospect” list. It’s always a great read.
In 1978, John Mackey was 25-year-old college dropout who believed that democratic socialism was a more “just” economic system than democratic capitalism. But his views soon changed after he and his girlfriend borrowed $45,000 from family and friends to open a small vegetarian grocery store in Austin, Texas. Although he was only earning $200 a month from his struggling business, his friends on the left viewed him as a “capitalistic exploiter” who was overcharging his customers and exploiting his workers.
In a nutshell the economic system of democratic socialism was no longer intellectually satisfying to me and I began to look around for more robust theories which would better explain business, economics, and society. Somehow or another I stumbled on to the works of Mises, Hayek, and Friedman, and had a complete revolution in my world view. The more I read, studied, and thought about economics and capitalism, the more I came to realize that capitalism had been misunderstood and unfairly attacked by the left. In fact, democratic capitalism remains by far the best way to organize society to create prosperity, growth, freedom, self-actualization, and even equality.
Mackey’s small store morphed into Whole Foods Market, which now has 345 stores and $4 billion in annual sales, but he’s still an advocate of free markets who believes that capitalism is misunderstood. In a recent speech Mackey claimed that, “capitalism has a serious branding problem . . . the recent recession was . . . blamed on greedy financial corporations, deregulation, and capitalism—market failures—rather than on bad government regulations and monetary policies—government failures.”
It is arguable that celebrated rapper Lil’ Wayne has completely lost his mind. In his newly released, grossly pathetic song “Karate Chop” the rapper spits in the face of the family of civil rights martyr Emmett Till by juxtaposing a reference to sexual conquest with the brutal race-driven murder of the teenager in 1955. In the song “Karate Chop (Remix),” Lil’ Wayne says that he intends to “Beat that p**sy up like Emmett Till.”
For those unfamiliar with the story, Emmett Till was murdered in Mississippi at the age of 14 for allegedly flirting with a white woman. After being kidnapped, he was beaten for several hours. His murderers then gouged out one of his eyes before shooting him and tossing into the Tallahatchie River with a 70-pound cotton gin fan tied around his neck so his body wouldn’t float up to the surface. The plan failed and his body was discovered a few days later by two boys fishing. The incident launched a national outcry for justice when the truth about Mississippi racism was put on display when Till’s mother insisted that her son have an open casket funeral.
It is difficult to make sense of what was going through the minds of all those associated with the song. And who at Epic Records thought it was a good idea to release this song? Lil’ Wayne’s music continues to hold its place as an enemy of civil society. Syracuse University professor Dr. Boyce Watkins rightly observes,
Hip-hop music is one of the most powerful and persuasive art forms in the history of the world, and it is now being used to enslave the minds of young black people so that they might become food for the prison industrial complex. Lil Wayne’s reference to Till is just the latest effort to dumb down black America and to produce messages that are nothing short of disgustingly toxic.
As an African American, L.A. Reid, chairman and CEO of Epic Records, should not only be ashamed of his organization for releasing the song but he should be prepared for significant market response. The entire song is a celebration of debauchery and immorality, and the fact that Lil’ Wayne’s music has fans at all, reveals how debase American culture is today. Moreover, given the fact that Wayne’s music is popular among teens and young adults of all races and economic classes and that Lil’ Wayne will continue fill stadiums for concerts might be a signal for my America’s new nickname is slowly becoming “Gomorrah.” As we can see the market is reflecting the moral commitments of American consumers. Lil’ Wayne’s music will only go away when American consumers refuse to support filth.
During his recent State of the Union address, President Obama argued for increasing the federal minimum wage:
Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher.
Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. We should be able to get that done. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.
In “The Moral Meanings of Markets,” in the latest issue of the Journal of Markets & Morality, Ryan Langrill and Virgil Henry Storr argue that markets ought to be understood and defended not simply as amoral, or merely moral, but as robustly moral spaces. In exploring the contention that markets reward virtues besides prudence, Langrill and Storr illustrate how market exchanges tend to promote civility and politeness. “It makes sense for profit-seeking businessmen to invest in goodwill and good customer service,” they write.
A recent piece in the Harvard Business Review, however, underscores the reverse phenomenon, the costs of rudeness. As Christine Porath and Christine Pearson write in “The Price of Incivility,” the virtues required for good business are not merely oriented towards customers. “Rudeness at work is rampant, and it’s on the rise,” they write: “Nearly everybody who experiences workplace incivility responds in a negative way, in some cases overtly retaliating. Employees are less creative when they feel disrespected, and many get fed up and leave. About half deliberately decrease their effort or lower the quality of their work.”
But Porath and Pearson also note that “incivility damages customer relationships. Our research shows that people are less likely to buy from a company with an employee they perceive as rude, whether the rudeness is directed at them or at other employees. Witnessing just a single unpleasant interaction leads customers to generalize about other employees, the organization, and even the brand.”
The costs of rudeness are illustrated even more clearly outside the context of “competitive market settings,” as Langrill and Storr relate. They note John Mueller’s observation that “since enterprises like these cannot ration by price, they are inclined to ration by rudeness.” And even outside the context of “non-price competition,” as we observe in our own experiences everyday, there are costs associated with rudeness. Customers can certainly use rudeness as a rationing mechanism.
How much would it be worth to you to be treated rudely the next time you stop in at a McDonald’s or buy something from the supermarket? How cheap would things have to be for you to shop at the jerk store? Just how good would the lobster bisque have to be for you to buy it from the Soup Nazi?
After decades of bloody turmoil between Protestants and Catholics in Northern Ireland, on March 26, 2007, Ian Paisley and Gerry Adams, sitting side-by-side at Stormont confirmed that power-sharing will return to Northern Ireland on May 8th of that same year. It was supposed to be a “new era.” Unfortunately, in order for Ireland to recover from decades of a very complicated history it needs a growing economy. Northern Ireland’s economy is in steep decline because it remains such a high-taxed welfare state.
For example, jobless remains at extremely high levels. The BBC reports that between June and August of 2011 8.1% of the population were unemployed. In fact,
Over the year, the number of people claiming unemployment benefit has increased by 4.8%, to 63,400, while in the UK as a whole the figure has fallen by 1.4%. A large proportion of the unemployed are young people, with 21.1% of those between aged between 18 and 24 now unemployed, up 3.0% over the year.
Northern Ireland also has high minimum wage rates—about $7.87/hr for workers 18-20 years-old—and a ridiculous corporate tax rate of 24%. This “one-two punch” does nothing but discourage the starting of new businesses, foreign direct investment, and provide incentives for companies not to hire young people. The Central Bank of Ireland, in a moment of common sense, now believes that maybe, just maybe, high corporate taxes stifle job creation. According to the BBC,