Archived Posts May 2010 » Page 3 of 4 | Acton PowerBlog

A while back, Bevan Sabo and Ariel Goldring at Free Market Mojo interviewed me on a wide range of subjects. They’ve kindly granted us permission to post some excerpts:

FMM: Capitalism requires a large degree of selfishness. Though there is certainly room for charity in a free-market system, individuals and firms must pursue their own selfish interests in order for an economy to thrive (or even succeed). How does a Christian love his neighbor as himself and still function as a capitalist?

Father Sirico: I do not share the use of the word selfishness in the way that it is employed in this question. A proper self regard is based on the belief in my own inherent dignity and this requires “self love” but not an inordinate self-love or self-preoccupation which is willing to subordinate others to my own ends, either coercively or in a manipulative manner which disregards the same dignity of others. The word selfishness as it is used in common parlance does not reference rational self-interest but rather a self preoccupation and disordered priority.

From a Christian anthropological point of view the human person (who is much more than “the individual”) is a combination of his individuality and his sociality, his autonomy and relationships. From the first moment of our existence we are simultaneously autonomous (in that we are genetically distinct from our mothers), yet in relation to her while in the womb. The whole of our existence following is a working out of this interplay of our autonomy and our social nature. A Christian’s love for his neighbor is rooted in solidarity which is the recognition of a profound connection between human beings. It is, in a sense, a recognition of myself in the other. Because all human beings share an intrinsic dignity we ‘love our neighbors as we love ourselves’. Capitalism, which is only the economic extension of this anthropological truth, can be lived out from this perspective, but in order to be secure, just, and enduring, it needs to rooted in the historical development of such an anthropology.

FMM: In July of last year, the Guardian reported on Pope Benedict XVI’s third encyclical, entitled Charity in Truth. For me, the following is a particularly disturbing paragraph from the article:

The pope today called for a “profoundly new way” of organising global finance and business, calling for a new social and ethical dimension to capitalism and arguing the case for a new world political authority to help champion “the common good”.

The idea of the “common good” goes against the spirit of individualism that is an essential part of capitalism and any proper government. Can you discuss Charity in Truth, particularly, its ramifications for those who consider themselves both Christians and capitalists?

Father Sirico:
If one is going to really understand papal encyclicals one must understand the tradition and theological milieu from which they emerge and attend to the precise definitions that are given to various specific phrases or concepts. In the case of the latest encyclical Caritas in Veritate many have asked questions about what the pope was addressing when he called for a “New World political authority”. I very much doubt your readers want from me a full exegesis of this section of the encyclical, but let me summarize by saying that this phrase is used in context with the references to subsidiarity elsewhere in the encyclical (e.g., no. 57) which is therein described as “the most effective antidote to any form of all-encompassing welfare state.”

Thus it is explicitly NOT the pope’s intention to be calling for some kind if ‘super state’, but rather for a global solidarity and authority “which cannot be imposed by force” (cf., Mater et Magistra, no. 130). The encyclical also cites a number of other references it is drawing upon, all of which are noted in the critical apparatus of the encyclical itself and all of which repudiate any kind of ‘super global state’. (more…)

From the movie Fight Club (1999):

Narrator: Tyler, you are by far the most interesting single-serving friend I’ve ever met… see I have this thing: everything on a plane is single-serving…
Tyler Durden: Oh I get it, it’s very clever.
Narrator: Thank you.
Tyler Durden: How’s that working out for you?
Narrator: What?
Tyler Durden: Being clever.

The Hill reports that Dems feel healthcare fatigue.

Blue Dog Earl Pomeroy (D-N.D.), who voted for the health overhaul, said the debate has shifted to the Obama administration, which must now implement the bill. “The healthcare bill is done,” Pomeroy said. “The action on healthcare is now in the executive branch as they implement the bill. It’s critically important that they implement it in a sound way, and I believe the attention of Congress is best spent on overseeing the sound implementation of this bill.”

Clever. Vote to nationalize the U.S. health care system even though you didn’t bother to read the 2,400-page bill. Then walk away because you’re “tired” and want to leave the heavy lifting to the White House. Plus, more photo-ops and press releases about health care from Rep. Pomeroy’s office would only serve to keep this on the mind of North Dakota voters.

Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) agreed with the premise that “members would be wary of major health legislation after we’ve spent so much time — we do have other priorities.” … “I could see that people would be exhausted if we were doing something major and controversial,” Waxman told The Hill. “So I think that we’ll probably limit ourselves right away in terms of what we’ll be pursuing.”

Paul Howard at City Journal looks at Obamacare’s Hidden Costs, a phenomenon certain to increase the fatigue factor among Obamacare supporters in the months and years ahead:

While the full cost of President Obama’s health-care legislation won’t be apparent until federal subsidies to the uninsured start flowing in 2014, Americans are getting an early glimpse of some of the unintended—but very costly—consequences of rushing through a 2,400-page bill affecting 17 percent of the economy. Since the president signed the bill into law on March 23, dozens of companies have reported to the Securities and Exchange Commission the losses that they expect to take as a result of the legislation. (Companies that offer drug benefits to their retirees will now be taxed for the partial federal subsidy that they receive for each retiree.) The U.S. Chamber of Commerce estimates that as many as 40 major companies will take a hit, for a total of $3.4 billion; other cost estimates run even higher.

Greece, once again, provides a warning. Investor’s Business Daily asks, Guess What Greece Has To Jettison?:

Greece was told that if it wanted a bailout, it needed to consider privatizing its government health care system. So tell us again why the U.S. is following Europe’s welfare state model.

The requirement, part of a deal arranged by the IMF, the European Union and the European Central bank, is a tacit admission that national health care programs are unsustainable. Along with transportation and energy, the bailout group, according to the New York Times, wants the Greek government to remove “the state from the marketplace in crucial sectors.”

This is not some cranky or politically motivated demand. It is a condition based on the ugly reality of government medicine. The Times reports that economists – not right-wingers opposed to health care who want to blow up Times Square – say liberalizing “the health care industry would help bring down prices in these areas, which are among the highest in Europe.”

Of course most of the media have been largely silent about the health care privatization measure for Greece, as it conflicts with their universal, single-payer health care narrative.

In the Rapids City (S.D.) Journal, columnist Rick Kahler quotes an anecdote from an fellow financial planner:

“I have some good friends (dual Greek and U.S. citizens) who live in Athens. They tell me corruption is rampant and every tax increase is met by an exponential increase in the underground, noncompliant economy. There is no sense of duty to pay taxes. There is no sense of dishonor asking someone to transact business outside of the system.

“Greece’s health care system just about collapsed when it became socialized. First, long lines led to treatments being scheduled so far in the future that costs were reduced because patients routinely died before the treatment date. Citizens responded by taking paper bags filled with paper currency to doctors in exchange for prompt treatment.

“When this practice became common, the government eventually began arresting doctors.

Did this make the system function properly? Nope. The doctors simply used their nice European Union passports to leave the country and seek work elsewhere.

“Nurses were then expected to provide medical care they hadn’t been trained to do. This at least made costs go down—nurses started fleeing, too, so that salary expense declined. My friends in Athens report many Greek hospitals are ‘just walls—no doctors, no nurses, not even anyone worth bribing. When we need care, we buy a ticket to the U.S.”

Check out the Acton Institute resource page on Health Care.

I want to second Marc’s article recommendation from earlier today. The phrase “a must read” is badly overworked, but in this case I can’t help myself: Claire Berlinski’s A Hidden History of Evil in the latest City Journal is a must-read. A few excerpts:

Communism was responsible for the deaths of some 150 million human beings during the twentieth century. The world remains inexplicably indifferent and uncurious about the deadliest ideology in history.

For evidence of this indifference, consider the unread Soviet archives. Pavel Stroilov, a Russian exile in London, has on his computer 50,000 unpublished, untranslated, top-secret Kremlin documents, mostly dating from the close of the Cold War. He stole them in 2003 and fled Russia. Within living memory, they would have been worth millions to the CIA; they surely tell a story about Communism and its collapse that the world needs to know. Yet he can’t get anyone to house them in a reputable library, publish them, or fund their translation. In fact, he can’t get anyone to take much interest in them at all.

Then there’s Soviet dissident Vladimir Bukovsky, who once spent 12 years in the USSR’s prisons, labor camps, and psikhushkas—political psychiatric hospitals—after being convicted of copying anti-Soviet literature. He, too, possesses a massive collection of stolen and smuggled papers from the archives of the Central Committee of the Communist Party, which, as he writes, “contain the beginnings and the ends of all the tragedies of our bloodstained century.” These documents are available online at bukovsky-archives.net, but most are not translated. They are unorganized; there are no summaries; there is no search or index function. “I offer them free of charge to the most influential newspapers and journals in the world, but nobody wants to print them,” Bukovsky writes. “Editors shrug indifferently: So what? Who cares?”

Stroilov claims that his documents “tell a completely new story about the end of the Cold War.” … They suggest, for example, that the architects of the European integration project, as well as many of today’s senior leaders in the European Union, were far too close to the USSR for comfort. This raises important questions about the nature of contemporary Europe….

According to Zagladin’s reports, for example, Kenneth Coates, who from 1989 to 1998 was a British member of the European Parliament, approached Zagladin on January 9, 1990, to discuss what amounted to a gradual merger of the European Parliament and the Supreme Soviet.

Zagladin’s records also note that the former leader of the British Labour Party, Neil Kinnock, approached Gorbachev—unauthorized, while Kinnock was leader of the opposition—through a secret envoy to discuss the possibility of halting the United Kingdom’s Trident nuclear-missile program.

“We now have the EU unelected socialist party running Europe,” Stroilov said to me. “Bet the KGB can’t believe it.”

Bukovsky’s book about the story that these documents tell, Jugement à Moscou, has been published in French, Russian, and a few other Slavic languages, but not in English. Random House bought the manuscript and, in Bukovsky’s words, tried “to force me to rewrite the whole book from the liberal left political perspective.” …

In France, news about the documents showing Mitterrand’s and Gorbachev’s plans to turn Germany into a dependent socialist state prompted a few murmurs of curiosity, nothing more. Bukovsky’s vast collection about Soviet sponsorship of terrorism, Palestinian and otherwise, remains largely unpublished.

No one talks much about the victims of Communism. No one erects memorials to the throngs of people murdered by the Soviet state….

Indeed, many still subscribe to the essential tenets of Communist ideology. Politicians, academics, students, even the occasional autodidact taxi driver still stand opposed to private property. Many remain enthralled by schemes for central economic planning. Stalin, according to polls, is one of Russia’s most popular historical figures. No small number of young people in Istanbul, where I live, proudly describe themselves as Communists; I have met such people around the world, from Seattle to Calcutta.

The full 3000-word essay is here. It’s well worth the time.

Open the books

Having recently finished reading Jean-François Revel’s Last Exit to Utopia – in which he excoriates leftist intellectuals for ignoring the crimes of communist totalitarianism and their efforts to resurrect the deadly ideology – and having just read a few more chapters of Solzhenitsyn’s Gulag Archipelago over lunch, it seems providential that I would stumble across this article at City Journal on the failure of researchers to seriously dig into the now-available archives of the Soviet Union:
Pavel Stroilov, a Russian exile in London, has on his computer 50,000 unpublished, untranslated, top-secret Kremlin documents, mostly dating from the close of the Cold War. He stole them in 2003 and fled Russia. Within living memory, they would have been worth millions to the CIA; they surely tell a story about Communism and its collapse that the world needs to know. Yet he can’t get anyone to house them in a reputable library, publish them, or fund their translation. In fact, he can’t get anyone to take much interest in them at all.

Then there’s Soviet dissident Vladimir Bukovsky, who once spent 12 years in the USSR’s prisons, labor camps, and psikhushkas—political psychiatric hospitals—after being convicted of copying anti-Soviet literature. He, too, possesses a massive collection of stolen and smuggled papers from the archives of the Central Committee of the Communist Party, which, as he writes, “contain the beginnings and the ends of all the tragedies of our bloodstained century.” These documents are available online at bukovsky-archives.net, but most are not translated. They are unorganized; there are no summaries; there is no search or index function. “I offer them free of charge to the most influential newspapers and journals in the world, but nobody wants to print them,” Bukovsky writes. “Editors shrug indifferently: So what? Who cares?”

If we have a duty to remember the victims of Naziism and to ensure that the hateful and vicious ideology of Hitler never rises again – and we do – do we not also have the same duty when it comes to the millions who were starved and worked to death in the communist Gulag? This material needs to be properly studied, translated, and released soon. The fact that it hasn’t been already is a shame, and an insult to the victims of communist tyranny.

This week’s Acton Commentary:

Our economic life is concerned with more than just the objective exchange of goods and services. Far from being morally neutral, it is an expression of how we understand our dependence on God and neighbor and is the means by which we fulfill, or not, our obligations toward them. Both for reasons of morality as well as long term economic efficiency, we cannot overlook or minimize the centrality of personal virtue, and of a culture of virtue, to the success of the free market. It is not enough for me to be good; we must be good together. Or at minimum, and whatever our personal moral shortcomings, culturally we must value and reward moral excellence.

Jack Cashill understands this and in his new book, Popes & Bankers: A Cultural History of Credit & Debt, From Aristotle to AIG, he traces the changing moral attitudes towards lending and borrowing in Western culture. From the beginning the author is clear that we cannot separate a conversation about debt and credit, and so the economics of the free market, from a conversation about our personal and cultural moral lives.

Quickly the author takes us through some 25 centuries of social history. Along the way we hear from Dante and Shakespeare. To my delight, The Merchant of Venice has a recurring role in Cashill’s analysis and he uses effectively the changing portrayals of Shylock to illustrate shifting cultural attitudes toward debt.

Aristotle and Aquinas also make an appearance and join a cast that includes Medieval popes, Renaissance Jewish lenders, Protestant Reformers, 19th Century American robber barons and financiers. And of course our favorite villains, the bankers, lenders and borrowers who figure so prominently in the recent economic collapse make an appearance. Though the tone is at time a bit too flippant for my tastes (especially when discussing the Medieval Catholic Church), the text offers a good historical overview of the cultural and moral debate about debt. Throughout the author highlights intimate connection between moral character and economic life.

Cashill locates our current distress in the gradual cultural changes in the “fifty or so years since interest rates” were last at 1 percent. This cultural shift has “had less to do with the behavior” of lenders and more to do with our unwillingness to censure “the behavior of consumers, especially the prodigal” among us. While not minimizing the “downside” of “major investment houses” shifting “from partnerships to corporations” (which both “democratized Wall Street” even as “it diminished long-term loyalty and distanced executives from the consequences of failure”) he locates our moral failure in our growing evermore “dependent on credit.”

Through governmental and private institutions, Western culture is now eager “to oblige its prodigals” and extend to them the credit that allows them to live, for a short time at least, above their means. In addition where once we thought of “prodigals as sinners” today we “think of them as they think of themselves–as victims.” Cashill points out that “the real divide in America today is not between left and right but between those who would sympathize” with the prodigals among us “and those who would not.” While we condemn “predatory lenders” we never even discuss, much less censure, the”predatory borrower” who also played a central role in the collapse of the housing market.

Ideally our willingness to go into debt reflects our confidence in the future and rather than a desire to fulfill momentary desires. For this reason, we should think of debt, as Cashill does (and as Western cultural has historically) as a profoundly moral and is not simply economic question. Because we have lost sight of the necessary connection between virtue and an efficient free market, we now face a widespread lack of confidence in the economy.

Our lack of confidence reflects a more fundamental a lack of trust in the future. To borrow from moral theology, the economic crisis is a crisis of despair; we have lost faith in the goodness of tomorrow.

So how do we reclaim hope in the economic sphere? As Aristotle has it, we must be “liberal.”

Needless to say Aristotelian liberality is markedly different than our contemporary understanding. For Aristotle to be liberal means that we not spend more than we have and then spend only “on the right objects.”

But true liberality can only exist within a living tradition of moral virtue. In our current circumstances we are sorely tempted to settle for merely technical solutions. Yes, these are important but what is needed most is repentance and the cultivation of the cardinal, and dare I say, theological, virtues. Whether this will happen or not depends on how we exercise our personal freedom and the decisions we make as a culture.

In any case Cashill’s work offers us a sound foundation from which to argue in the public square that our economic pursuits must take place within a “culture of life” and this is necessary not only morally but also for the efficient working of the free market.

I did an interview with the Harvard Political Review several weeks ago.  The story is largely a paean to secularism. Steven Pinker even takes credit for democracy as an achievement of secularists.  I know.  That’s the history you get from an evolutionary psychologist.

To the author’s credit, I was certainly treated fairly.  I only wish she’d offered more of our interview to her readers.  For those who would like to read it, I have posted it in full over at First Thoughts.

I have close friends here in Michigan who are out of work–talented, principled, hard-working people who are either unemployed or seriously underemployed. My heart breaks for them and for everyone eager to work who has been blindsided by the current recession. Unfortunately, government policies to help sometimes make the situation worse. A recent Detroit News story offers fresh evidence, evidence suggesting that Michigan’s bloated nanny state is creating perverse incentives in the labor market, incentives that are both economically and morally degrading:

In a state with the nation’s highest jobless rate, landscaping companies are finding some job applicants are rejecting work offers so they can continue collecting unemployment benefits.

Members of the Michigan Nursery and Landscape Association “have told me that they have a lot of people applying but that when they actually talk to them, it turns out that they’re on unemployment and not looking for work,” said Amy Frankmann, the group’s executive director. “It is starting to make things difficult.”

Chris Pompeo, vice president of operations for Landscape America in Warren, said he has had about a dozen offers declined. One applicant, who had eight weeks to go until his state unemployment benefits ran out, asked for a deferred start date.

“It’s like, you’ve got to be kidding me,” Pompeo said. “It’s frustrating. It’s honestly something I’ve never seen before. They say, ‘Oh, OK,’ like I surprised them by offering them a job.”

Some job applicants are asking to be paid in cash so they can collect unemployment illegally, said Gayle Younglove, vice president at Outdoor Experts Inc. in Romulus.

State benefits last for up to 26 weeks.

The unemployed can then apply for extended federal benefits that increase the total time on the public dole up to a maximum of 99 weeks.

The federal jobless benefits extension “is the most generous safety net we’ve ever offered nationally,” said David Littmann, senior economist of the Mackinac Center for Public Policy, a free-market-oriented research group in Midland. The extra protection reduces the incentive to find work, he said.

The solution isn’t to walk away from charity. The solution is to return the lion’s share of charity work to families, churches and local communities. This is charity with a human face, charity that can make important distinctions informed by local knowledge, charity that promotes human flourishing rather than dependency and dysfunction. It’s a change that will require governments to stop crowding into the sphere of private charity, and for families, churches and community organizations to prayerfully crowd back into charitable work they may have turned over to the government in decades past.

No system of charity is perfect, private or otherwise. And government-directed help has its place, such as in the case of some natural disasters. However, the evidence continues to mount that long-term, state directed charity leads to moral and economic disaster. It’s time to change.

At the Volokh Conspiracy, Todd Zywicki looks at a new article by Zeljka Buturovic and Dan Klein in Econ Journal Watch which aims to “gauge economic enlightenment based on responses to eight economic questions.” Among other things, the researchers filter the survey results for political ideology. Zywicki’s highlights:

  • 67% of self-described Progressives believe that restrictions on housing development (i.e., regulations that reduce the supply of housing) do not make housing less affordable.

  • 51% believe that mandatory licensing of professionals (i.e., reducing the supply of professionals) doesn’t increase the cost of professional services.
  • Perhaps most amazing, 79% of self-described Progressives believe that rent control (i.e., price controls) does not lead to housing shortages.
  • Zywicki said that “the questions here are not whether the benefits of these policies might outweigh the costs, but the basic economic effects of these policies. Those identifying as “libertarian” and “very conservative” were the most knowledgeable about basic economics. Those identifying as ‘Progressive’ and ‘Liberal’ were the worst.”

    Volokh blogger Ilya Somin follows with a number of caveats about the survey.

    The study certainly rings true when measured against the economic pronouncements of “progressive” faith-based groups. As I showed in my review of Prophet Jim Wallis’ latest book, the religious left’s understanding of basic economic principles is pretty dismal.

    From the Greek daily Kathimerini:

    Witnesses said that protestors marching past the building ignored the bank employees’ cries for help and that a handful even shouted anti-capitalist slogans. [ ... ] It took a statement from President Karolos Papoulias to best sum up Greece’s dire situation and the frustration that many people are feeling with the political system. “Our country has reached the edge of the abyss,” he said. “It is everybody’s responsibility that we do not take the step toward the drop. Responsibility is proved in action, not in words. History will judge us all.”

    From columnist Alexis Papachelas, in the same paper:

    Now we have an intelligentsia that is hooked on patron-client exchanges and mediocrity, and a political establishment whose biggest concern is keeping its piece of the pie safe. On the flipside of the same coin we have a culture of protest in which anything goes and which tries to justify every “accident,” like yesterday’s murder of three working people by a hooligan who flipped them the finger when he saw them choking on the smoke of his firebomb. Now that we have succeeded in running the country into the ground, it is time to either rise to the occasion or kneel to the developments. The deal with the IMF and the EU will bring a lot of pain to a lot of people who are not to blame for the situation. We can’t throw money at the problem because we have none.

    George Will on the welfare state:

    The chief beneficiaries of the welfare state ethos are the organized interests on whose behalf most government interference with the economy is undertaken. These interests receive the lion’s share of the subsidies which, drawn from general tax revenues or imposed by government-enforced restriction of competition, are our major means for redistributing wealth. As a result, the net effect of government manipulation of the economy is negative for the poor. That is, one clear result of the expansive activism of our expanded government is a lower living stand for the poor.

    In another Acton Commentary this week, Research Director Samuel Gregg looked at Catholic dissenter Fr. Hans Küng, who recently published an “open letter” broadside directed at the Vatican. Küng’s letter includes the now discredited Malthusian warning about global overpopulation (see video above). The letter, writes Samuel Gregg, “shows just how much he remains an unreconstructed creature of the 1960s.”

    +++++++++

    Hans Küng’s Malthusian Moment

    By Samuel Gregg

    In April, the world received yet another global missive from the 82-year-old Swiss theologian, Fr. Hans Küng. Perhaps the world’s most famous Catholic dissenter from Catholic teaching, Fr. Küng’s “open letter” to the world’s Catholic bishops contained his usual critique of the papacy and his now-tediously familiar prescriptions for changing the Catholic Church.

    Almost 31 years ago, Rome and Germany’s Catholic bishops stripped Küng of his license to teach as a Catholic theologian because, by Küng’s own admission, he does not believe in some central tenets of the Catholic faith. Some would say Rome’s action was merely an exercise in ensuring truth in advertizing. This has not stopped Küng, however, from continuing to exhort Catholicism to adopt the path followed by many mainline Protestant confessions in the West since the 1960s.

    (more…)