Category: Business and Society

I ran across this video yesterday (courtesy of ESA), which I thought presented some interesting challenges and issues:

The video was presented on Upworthy as an example of something “all white people could do to make the world a better place,” that is, use their white privilege to address injustices.

A number of economists, including Milton Friedman and Thomas Sowell, have written about the power of the market economy to overcome racism and discrimination, to put people into relationships on the basis of economic decision-making rather than skin color. As Friedman contended,

the preserves of discrimination in any society are the areas that are most monopolistic in character, whereas discrimination against groups of particular color or religion is least in those areas where there is the greatest freedom of competition.

But as a conversation I had with some others about the video also illustrates, there are times when (at least in the short run interests of the firm), something like profiling can seem to make some economic sense. The successful passing of one bad check can really hurt a store’s margins. Practically speaking the stores often take a complete loss.
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Blog author: jballor
Wednesday, August 21, 2013
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At the Washington Examiner, Timothy Carney writes (HT: The Transom), “When liberals talk about community, conservatives are too quick to raise the Gadsden Flag and shout, ‘Leave me alone!'” He goes on to examine “the reactions to catchphrases made famous by Barack Obama and Hillary Clinton — ‘You didn’t build that’ and ‘It takes a village.'”

Despite the negative reaction from many conservatives, says Carney, Obama’s statement

in its full context, ‘you didn’t build that’ is true. Obama’s line began this way: ‘If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive …’

This is actually something conservatives frequently celebrate. Entrepreneurs often need investors and they always need customers.

WIPFSTOCK_TemplateI explore this dynamic at some length in my new book, Get Your Hands Dirty: Essays on Christian Social Thought (and Action). As I write in chapter 1, “The Human Person, Family, and Civil Society,” the dichotomy of collectivism/individualism is highly problematic: “The dynamics of community life, which are the source and school of civic virtue, are often cast simply in terms of the atomistic individual or the all-encompassing collective.”

I argue with respect to the “you didn’t build that” statement that “even though the president’s words here may have been designed to cater to a base more inclined toward collectivism, conservatives and independents should not respond by rejecting the kernel of truth contained in the president’s remarks.” I go on to examine the ways in which we are interdependent, in the context of the family, business, and the church.

As I conclude, “We shouldn’t let the president’s overemphasis on the government’s role in fostering and sustaining community lead us to abandon a more comprehensive, variegated, and richer vision of community and social life. A proper understanding of human community is a corrective to, not a symptom of, collectivist thinking.”

Get Your Hands Dirty is available at Amazon and at the publisher’s website.

PowerBlog readers will be excused for missing this, as I suspect there are not many who frequent the MTV Teen Choice Awards. But don’t let your skepticism prevent you from watching this video of Ashton (really, “Christopher Ashton”) Kutcher’s acceptance speech, in which he exhorts the younger generation to get its hands dirty with hard work:

“Opportunity looks a lot like hard work.” There are many connections to be made here with this insight, not least of which is with Lester DeKoster’s view that work is “a glorious opportunity to serve God and our neighbors by participating in God’s creative work through cultivation of the creation order.” Kutcher’s basic point is that work has some important lessons to teach us. “I’ve never had a job in my life that I was better than,” says Kutcher. He was, rather, grateful to have the gift of productive work, and passionately describes how each job, whether manual labor or minimum wage work, was a “stepping stone” to the next.

One of the great things about the speech, as Richard Clark writes, is the way Kutcher addressed his audience, how “he told them what he’d want to be told, and he treated them in the way he’d want to be treated.”

Kutcher concludes by invoking the example of Steve Jobs, who Kutcher plays in an upcoming biopic, and urges his audience to “build a life” through their work. Kutcher manages to include some insight about the nature of institutions and what it means to engage cultural realities as we live and work. This is something Millennials desperately need to hear, as David Brooks has written, and it’s something that Steve Jobs has to teach us about the nature of our jobs.

Blog author: jballor
Thursday, August 15, 2013
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There’s some evidence that the distress associated with poverty, such as worry about where your next meal is coming from, can create a negative feedback loop, leaving the poor with fewer non-material resources to leverage against poverty.

In 2011, a study by Dean Spears of Princeton University associated poverty with reduced self-control. His empirical study attempted “to isolate the direction of causality from poverty to behavior,” resulting one possible explanation “that poverty, by making economic decision-making more difficult, depletes cognitive control.” A working paper from NBER from earlier this year examined “Poverty and Self-Control,” and Bernheim, Ray, and Yeltekin found that “poverty damages the ability to exercise self-control.”

A working explanation runs along these lines: there is a finite amount of mental energy that each person has, and the more of it that is spent on things like worry and concern for acquiring basic needs each day, the less there is available for things like planning, making sound financial decisions within a limited timeframe, and other choices related to economic success over the long-term.

It can be difficult for social sciences, especially those like economics which often rely on models of rational actors, to account for the factors which lead to seemingly irrational behavior. But an anthropology informed by Christian theology, which recognizes the spiritual nature of the human person, including the anxiety that often attends to material insufficiency, goes a long way towards providing a coherent explanation and understanding of the complexities of poverty. The poor often experience a kind of despondency that can be crippling. Worry can create feedback loops which tend to reduce a person’s perspective of what is possible, a kind of poverty trap from which it can be difficult to escape.

Johnny Cash and Willie Nelson capture this dynamic well in their performance of “Worried Man,” from VH1 Storytellers (1998):

In the full recording of the Storytellers album, Johnny tells the genesis of this version of the song. He had encountered a beggar in Falmouth, Jamaica, who said, “Mr. Cash, I’m a worried man. I’m a very worried man.” Johnny thought, “Man, here’s a new approach. I’ve never had this one before.” Johnny asked what was worrying him, and the bum responded, “I got a wife and nine pikni [children] and no job. That makes me a worried man.”

As Robin Klay and Todd Steen explore in their article in the forthcoming issue of the Journal of Markets & Morality, the Christian virtue of hope is an important antidote to the devastating effects of worry, uncertainty, and depression. In “Christian Hope and God’s Providence in the Context of Economic Change and Development,” Klay writes about her experiences of the “‘stubborn hope’ of poor people, who, having very little, are nevertheless determined to use their labor, knowledge of markets and local resources, and small investments to open up a better future.”

Subscribe to the journal today to get access to the latest two issues, including Klay and Steen’s article as soon as it comes out.

And see the related piece by Todd Steen and me, “Hope and the Hunger Games,” over at First Things.

A recent Boston Globe headline reads: “Marketing to millennials can be a tough sell.” The article relates the differing approaches of Campell’s, Lindt USA, and GE when it comes to marketing to Millennials, highlighting a general skepticism and indifference toward advertising in the target demographic:

For instance, marketing materials for GE’s Artistry series of low-end appliances featuring retro design touches, due out this fall, says it focuses on “the needs of today’s generation of millennials and their desire to uniquely express themselves.”

Lindt USA recently introduced a line of chocolates — they include Berry Affair and Coconut Love flavors — that are wrapped in vibrant packaging and are being promoted through social media.

And packaging for Campbell’s Go Soup, which comes in microwavable pouches with ingredients such as chickpeas, quinoa, and smoked Gouda, features photos of young people with thought bubbles. The sayings include cutesy snippets like “Make your momma proud” and “What’s kickin’?”

The idea is to hook millennials now and remain connected with them as they progress to bigger and more expensive products.

But marketing specialists and consumers like Volain question the effectiveness of that approach.

“My immediate reaction to targeted marketing is to picture a bunch of people sitting around in a room saying, ‘How can we get these people to buy these products?’” [Anna] Volain [a millennial] said.

While I am sympathetic to Volain’s sentiment here, I think something deeper is at work. There is an erroneous anthropological assumption that people of a particular, generic group must be homogeneous enough that all one needs to do is figure out the perfect calculus for appealing to their sensibilities, and they will be hooked on a brand for life. In particular, I think the problem is ultimately a Marxist error: assuming that one can perfectly categorize a whole group of people and then act on their behalf. (more…)

Wizard of Id - Minimum WageThe protests organized by labor organizations to advocate for an increase in the minimum wage have garnered attention, most recently from the NYT, which editorialized in favor of such moves. Over at Think Christian, I weigh in with an attempt to provide some more of the complex context behind the moral evaluation of such mandates.

In the piece, I’m really less interested in the plight of current-minimum wage workers relative to those who might become minimum-wage workers with an increase, those who are currently priced-out of labor markets because of minimum-wage legislation, and those who will be priced out with an increase.

Earlier this week, Joseph Sunde discussed the issue with an eye towards the price of labor: “Prices are not play things.” I largely agree with Joseph about the significance of the price associated with various kinds of labor. The signal that minimum-wage workers should be receiving is that their work is not that specialized or valuable in the marketplace. You can rage against the values of the marketplace all you like, but that’s what the prices signal.
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This case has been made that government attempts to manage economies through regulation, laws, and taxes discourage entrepreneurs entering into the marketplace. I recently asked Michael, a young entrepreneur in his 20s, what were some of his fears about being a entrepreneur in America. We’re not using his full name to protect his identity but this is what he had to say:

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Entrepreneurs aren’t just born. Like any other endeavor, there are natural talents involved, but building a business takes an incredible amount of work and knowledge. It’s one thing to have an idea; it’s something else to figure out financing, girls in trainingmarketing, advertising, manufacturing….

At Verily magazine, Krizia Liquido tells of a program aimed at high school girls to help them learn necessary skills for entrepreneurial success. “Entrepreneurs in Training,” a 10-day intensive workshop, takes place at Barnard’s Athena Center for Leadership Studies in New York. (more…)

AApretzelsWhen walking through an airport or shopping mall the aroma hits me before I even see the store. If happiness had a scent I suspect it would smell like Auntie Anne’s soft pretzels. From the first whiff my knees go weak and my brain tells me that I will never know joy again if I pass up this salted, buttery, baked goodness. They are so good that I fully expect St. Peter hands them out at the Pearly Gates.

While I’ve long loved Auntie Anne’s, I never knew the inspiring story of it’s founder. Anne Beiler, a former “black-car Amish” tells Fortune Magazine how virtue and trust helped her become a successful entrepreneur. (She expanded her baked good empire with a loan from a Mennonite chicken farmer who “loved what we wanted to do, and he gave us $1.5 million on a handshake.”)

Beiler says Auntie Anne’s is a modern-day business miracle that never should have happened.

I had no formal education, capital, or business plan. But we practiced what I call the three small P’s. We started with a purpose — counseling and helping people. We had a product that supported our purpose. Then we got the people to do it. The three small P’s, in that order, result in the big P — profit. If you stay true to your values and purpose, you will get to profit.

Here’s her advice for running a business:

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Photo Credit: youngdoo via Compfight cc

Photo Credit: youngdoo via Compfight cc

In this week’s commentary, “Made to Trade,” I explore the natural dispositions that human beings have to produce, exchange, consume, and distribute material goods.

If you’ve ever noticed that a sandwich made by someone else tastes better than one you make yourself, you’ll know what I’m getting at: “Recognizing the satisfaction that comes from such a gift of service from another person illustrates an other-directed disposition that is a deep and constitutive part of human nature.”

There is a gracious foundation for giving and receiving, whether in the form of gifts and distributions or in exchange. As Benedict XVI writes in Caritas in Veritate, “Gratuitousness is present in our lives in many different forms, which often go unrecognized because of a purely consumerist and utilitarian view of life. The human being is made for gift, which expresses and makes present his transcendent dimension.”

Sometimes I think the ideas of gift and exchange can be too radically distinguished. Benedict describes a gift as something that “by its nature goes beyond merit, its rule is that of superabundance.” The relationship between love and justice, or between charity and merit, is complex and difficult to hold in proper balance. Emphasis of one at the expense of the other leads to errors of antinomianism or legalism.

What is clear, however, is the gracious foundation of all of our economics activities derive from God’s providential ordering. We give, receive, “truck, barter, and exchange,” as a manifestation of the constitutive sociality of our human nature, created in God’s image, male and female.