Category: Public Policy

What, exactly, was the point of the recent Summit of the Americas in Argentina? President Bush’s participation there seemed to accomplish little more than to excite street mobs and vandals. And then there was Venezuelan President Hugo Chavez, doing his best Fidel impersonation as he led opposition to a U.S.-backed free trade agreement. Alejandro Chafuen, president of the Atlas Economic Research Foundation, uses the occasion of the summit to succinctly catalog the ills that plague Latin America. “With few exceptions,” Chafuen writes in the Washington Times, “Latin Americans have reverted to feel-good nationalistic populism, while rejecting free-market growth strategies: They can feel good while doing poorly.”

The heart of the problem is weak protection of property rights and, in some places, an almost complete disregard for the rule of law. The results are incredibly destructive. As Chafuen puts it:

Despite Latin American economic growth rates averaging more than 5 percent in 2004 and similar growth anticipated this year, “capital flows” are negative, meaning more money leaves than enters the region. This is not due to foreign debt but a continued lack of confidence among long-term investors. Not surprisingly, as Latin America expert Andres Oppenheimer has noted, “only 1 percent of the world’s investment in research and development currently goes to Latin America.”

This “feel-good, nationalistic populism” is also winning converts in the United States. Democrat Congressman William Delahunt of Massachusetts has acted as a go-between to bring discounted heating oil from Venezuela to his constituents, thereby giving Chavez an opportunity to tweak the Bush administration. Another deal is in the works through a congressman in the Bronx. Delahunt describes Chavez’s move as a “humanitarian gesture” and evinces little concern that he may be working at cross purposes with the State Department’s policy toward Venezuela. Delahunt said he works for his constituents, not Condoleezza Rice.

In a piece in the Providence Journal, Colombian journalist and Harvard fellow Maria Cristina Caballero, cheers the rise of Chavez.

Chavez, the socialist strongman, has emerged as a more ferocious — and popular — opponent to Bush than apparently any American Democrat. While Bush pushes policies to import oil and export democracy, Chavez exports subsidized oil to his friends, which include Cuba and China as well as the poor people of Massachusetts and the Bronx, and — he says — spreads the wealth.

Fortunately for Chavez’s friends in Masschusetts and the Bronx, they are not living under the “strongman’s” rule of law. They would find that his discounted heating oil and free medical clinics staffed by Cuban doctors comes at a very high price.

Blog author: jballor
posted by on Monday, November 28, 2005

Hans Mahncke, an International Law and Trade scholar at Hong Kong’s Lion Rock Institute, takes to task recalcitrant NGOs in a recent TCS article. The essential sticking point is the inability to reform the WTO:

The WTO is plagued by two major faults. On the one hand, its rules have grown too complex, feature too many loopholes and allow for too much discretion on the part of those who actually understand them. On the other hand, if countries with greater negotiating clout cannot find a way to wiggle their way out of WTO commitments within the framework of multilateral rules, they simply circumvent these by entering into bilateral arrangements. Hence, assuming that NGOs are focused on a return to multilateralism, they ought to start investing their time and energy to lobby for fewer rules, rather than more.

This makes the point beautifully: the more complex and regulatory trade agreements are, the more likely they are to not be free. As Mahncke asks, “Ultimately, if someone, anywhere, wants to buy someone else’s goods or services at a mutually agreeable price, why should government, or NGOs, interfere with such an arrangement?” Good question.

Blog author: jspalink
posted by on Thursday, November 24, 2005

Acton is starting a new ad campaign which aims to raise awareness of effective ways to overcome poverty and world hunger. We encourage everyone to view our ads and to consider them seriously as they join the rest of the developed world in extending a hand to those in need.

If you’re interested in promoting real solutions to poverty, join our partnership of religious leaders. Visit our website to access valuable educational materials and connect with other sound economic thinkers. Together, we can turn goodwill into effective action.

Blog author: jspalink
posted by on Wednesday, November 23, 2005

The system that administers special education in the United States is one that “parents find unresponsive, and schools find expensive,” writes Jennifer Morse, Acton Senior Fellow in Economics. She takes a look at the implications of a recent Supreme Court ruling and comes up with a solution that involves the dreaded V-word: Vouchers.

Read the full commentary here.

Alan Anderson of the Sydney Morning Herald notes that Ronald Reagan’s joke about the Government’s view of the economy has become United Nations policy toward the internet. The Belmont Club blog notes that placing control of the Web into the hands of UN regulators will have far reaching negative consequences:

The United Nations: Working hard to create a less free and less useful internet!

One of the reasons the Internet has been so successful is that it has so far escaped the restraints of Filipino judges, Tunisian government officials and United Nations bureaucrats. Addresses which are published onto the root servers can be resolved and their content displayed, subject to the restrictions of their publishers. The United States, by refusing to regulate the Internet, has occupied the position of an information central banker maintaining the coin of the realm. If lower court Filipino judges and assorted bureaucrats get their way, the pathways of the Internet will be subject to bureaucratic gatekeeping, conducted in the name of “governance”. But the proper word would be debasement.

The moment the free flow of packets over the Internet is no longer substantially guaranteed, it will cease to be trusted. Companies which are building businesses worth billions over the Internet protocols would stop if they knew a relative of the Tunisian President had to be placated for commerce to continue. Applications such email, instant messaging, searches, e-commerce, online banking, virtual medicine — to name a few — would be at the mercy of bureaucratic caprice, not just in the United States, but in every swamp and backwater imaginable. In the end, governing the Internet, especially in the United Nations sense, might be indistinguishable from destroying it. But one can see how that would appeal to those who yearn for bad, bad old days.

Blog author: abradley
posted by on Wednesday, November 23, 2005

The newest phase in the fight for digital/intellectual property rights involves the recent Digital Rights Management software from Sony. Apparently, Sony’s “protected” audio CDs have been installing a “rootkit” onto your computer, and opening up your computer to yet more malicious software on the Internet (as if it isn’t bad enough already without a Sony rootkit). There are a couple of things I want to say about this – first, a short description of exactly what the problem is; and secondly, a look at the ethical/moral implications of this situation. (All you Computer Science professors out there: this is a very good case study if you are teaching a class on Software Ethics.)

So, what exactly happened? Sony, along with many other music companies, has been brainstorming up ways to prevent people from copying audio CDs. This is mostly a reaction to the Napster phenomenon from the turn of the millennium, but also to continued audio piracy. Sony’s solution to the problem has been the sale of protected CDs that put software on a device that identifies the CD as legitimate and allows playback. The software that Sony CDs have been installing onto computers around the world is flawed and has opened up countless computers to new trojans and other malicious software. Sony has since released patches that “remove” the flawed code, although the updated software seems to be equally flawed.

What are the ethical implications? First, and foremost, Sony has been installing software on computers without the informed consent or knowledge of its general user base. While this is bad enough, Sony has been installing a “rootkit” onto your computer – a program that has administrative access to everything on your computer, and hides certain files. Even granting Sony the benefit of the doubt, this is simply poor decision-making and poor programming. To make matters worse, they’ve used allegedly plagiarized code. Sony, as a leader among their competition, should be excelling in all of these areas using honest, open, and transparent means. A company such as Sony should be at the forefront of developing software and/or hardware that is easy to use, SAFE, and effective, not software that is deceptive and dangerous.

One more thing to say before I’m done venting… In response to RIAA president Cary Sherman’s following statement at a recent press conference:

“The problem with the SonyBMG situation is that the technology they used contained a security vulnerability of which they were unaware. They have apologized for their mistake, ceased manufacture of CDs with that technology, and pulled CDs with that technology from store shelves. Seems very responsible to me. How many times that software applications created the same problem? Lots. I wonder whether they’ve taken as aggressive steps as SonyBMG has when those vulnerabilities were discovered, or did they just post a patch on the Internet?”

People generally know that software that they install may contain bugs, and there is a user end license agreement that specifies the terms of those situations. An audio CD that you want to listen to is not equatable to general software installation.

Blog author: jballor
posted by on Tuesday, November 22, 2005

Check out this Marketplace story about real money being spent in the virtual world. The commodities of online gaming have real-world value to people, to the extent that a virtual island can cost upwards of $26,000 in the world of Project Entropia.

This leads me to ask with the Matrix’s Morpheus: ‘What is “real”? How do you define “real”? If you’re talking about what you can feel, what you can smell, what you can taste and see, then “real” is simply electrical signals intepreted by your brain…’

Thus the power of imagination makes the virtual world seem real. And perhaps for some lonely souls, even more real than the “real” world.

Theologian John Baillie writes, “I have long been of the opinion that the part played by the imagination in the soul’s dealings with God, though it has always been understood by those skilled in the practice of the Christian cure of souls, has never been given proper place in Christian theology which has too much been ruled by intellectualistic preconceptions.” But perhaps there’s some good reason why the imagination has been so treated.

It is precisely the imaginative element of human thinking that is so often used to create idols in our own image. John Calvin writes, “But as to my statement that some erroneously slip into superstition, I do not mean by this that their ingenuousness should free them from blame. For the blindness under which they labor is almost always mixed with proud vanity and obstinacy. Indeed, vanity joined with pride can be detected in the fact that, in seeking God, miserable men do not rise above themselves as they should, but measure him by the yardstick of their own carnal stupidity, and neglect sound investigation; thus out of curiosity they fly off into empty speculations.” There is no doubt that human creativity and ingenuity is a gift of God. But at the same time, these are fallen gifts, which are the source of much error, corrupt and fallible conceptions.

What might Morpheus say about the man who died after playing video games for 50 hours straight?

Morpheus: ‘Your mind makes it real, Neo. If you’re killed in the Matrix, you die here…. The body cannot live without the mind.’

Blog author: jballor
posted by on Monday, November 21, 2005

This month’s Esquire magazine is the annual “Genius” issue (with Bill Clinton as the coverboy, which might seem strange until you realize that the word “genius” is related to the words “genii” and “jinn,” which in mythology were often negative spiritual beings, “commonly believed to be responsible for diseases and for the manias of some lunatics”).

Speaking about the trouble with working through and for bureaucratic governments in his article “What I Did on My Summer Vacation: I Went to Africa,” (subscription required) Jeffrey Sachs, director of both the Earth Institute at Columbia University and the UN Millennium Project: “Officialdom the world over is pretty slow moving, pretty impractical, and pretty darn frustrating in many ways, so even when the proof of these concepts is clear, actually getting things done is not so easy.”

So when Sachs sees problems all over the world, he’s rightly frustrated by the governmental inability to deal with the issues. Through his hands-on experience, Sachs has learned to appreciate the necessary and decisive role private charity plays. He says with respect to the poverty, suffering, and death in developing countries,

It’s not very satisfactory to see this and not act. And so in the last couple of years I’ve started to talk about these problems with business leaders and philanthropists, and over and over again I’ve heard the same response: Don’t wait for the government. I’ll help you. So what kind of accidentally dawned on us was that we could just go ahead and get these concepts proven on the ground. And that’s what we are doing. And many philanthropists have come forward now and said, We’ll give you some backing; show us what you can do.

This is exactly the element that poverty advocate and U2 frontman Bono called for in a recent interview. “We need the marketing firepower,” he said. “We have the churches, the students, the rock stars, the movie stars, the cowboys. What we need now is corporate America.”

Sachs goes on to describe how the idea for Millennium Villages came about, through the interaction of field experts and donors: “…that’s how the Millennium Villages concept was born. The scientists said, Let’s move. The philanthropists said, Let’s move. A year ago we went and met with the community in Kenya and talked to people there about it. And they said, Let’s move!”

Sachs goes on to lay out the foundation for the UN Millenium Development Goals (MDGs), which emphasize both public and private sector engagement, but at over a 2:1 ratio of public over private. He writes of a meeting to find out what it would take to get developing countries out of poverty, “They said the public sector will do some and the private sector needs to do some, and that it should be about a seventy-thirty split. So that’s where the seventy cents came from. And that was adopted by the General Assembly of the UN in 1970.”

It’s unfortunate that the sensitivity that Sachs has at the beginning of the article to the unresponsiveness and corruption of government doesn’t lead him to primarily emphasize private rather than public aid. It’s appropriate to call governments to task for not living up to their pledges, the United States especially. But that finger-wagging shouldn’t take away from the “Let’s move, don’t wait for government” approach. That’s essentially my complaint with the church infatuation with the MDG’s…they tend to overemphasize the role of government and deemphasize personal and private giving.

Blog author: jballor
posted by on Friday, November 18, 2005

To expand the “scientist” as “priest” metaphor a bit, you may find it interesting to read what Herman Bavinck has to say on the fundamental place of “faith” with respect to all kinds of knowledge, including not only religious but also scientific:

Believing in general is a very common way in which people gain knowledge and certainty. In all areas of life we start by believing. Our natural inclination is to believe. It is only acquired knowledge and experience that teach us skepticism. Faith is the foundation of society and the basis of science. Ultimately all certainty is rooted in faith.

A little later he writes:

Clement of Alexandria in many places uses πιστις to denote all immediate knowledge and certainty and then says that there is no science without belief, that the first principles, including, for example, the existence of God, are believed, not proven. Especially Augustine highlighted the significance of belief for society and science. Those who do not believe, he says, never arrive at knowledge: “Unless you have believed you will not understand.” Belief is the foundation and bond uniting the whole of human society.

The point essentially is that all of us, scientist, pastor, gardener, or surfer, have presuppositions, first principles or principia that are by definition that “on which all proofs ultimately rest, [and] are not themselves susceptible of being proven: they are certain only by and to faith. Proofs, therefore, are compelling only to those who agree with us in accepting those principles. ‘There is no point in arguing against a person who rejects the first principles’ (Contra principia negantem non est disputandum).”

This final Latin phrase that Bavinck quotes, incidentally, is often traced back to Aristotle’s Rhetoric, but also appears in a form in the Summa Theologica of Thomas Aquinas: quod inferiores scientiae nec probant sua principia, nec contra negantem principia disputant, or “the inferior sciences neither prove their principles nor dispute with those who deny them” (ST 1.1.8).

As a brief aside, there is no relationship between the Greek word for faith (πιστις, or pistis) and epistemology as a “theory of knowledge,” which instead comes from Greek words meaning “to stand over.”

Blog author: jballor
posted by on Friday, November 18, 2005

Let me quickly respond to this week’s Acton Commentary:

While I agree in broad strokes with Dr. Larrivee’s analysis of the questionable assumptions of the fair trade movement, with respect to coffee in particular, I don’t agree that the problem is “low productivity in the countries in which farmers live.” I have previously argued that the source of the issue is in fact too much coffee, so that the market is saturated and cannot sustain high prices given the declining worldwide demand.

Dr. Larrivee later rightly observes that the fair trade system contributes to a situation which “would expand the supply until the price farmers receive dropped back to the subsistence level.” I think, in fact, this has already happened in the case of coffee, and the fair trade movement simply exacerbates the problem.

You can read more about my take on the situation here.