Archived Posts July 2010 - Page 2 of 4 | Acton PowerBlog

Courtesy Evangelical Outpost and the always-interesting 33 Things, here’s a video on the strangeness of the economics of incentives and punishments:



The lesson here is that people in real life, body and soul, are not simple rational economic actors who respond only to material realities.

We exist in the context of social webs and relationships. But we also have non-material faculties; consciences, free choice, creativity, speculative reason.

Homo economicus is useful as a partial model of human behavior, but it is not exhaustive, comprehensive, or reliably predictive. Why do economists try to universalize this model?

My theory is that it is in part a response to the post-Englightenment subversion of the unified field of learning. Theology was displaced, albeit briefly, as the queen of the sciences. Philosophy could not hold on, and was torn down by the clamoring crowd of other disciplines. Now each discipline seeks to place itself upon the throne, thus we get tyrannizing and universalizing claims from every academic discipline. Everyone tries to explain everything in the terms of their own discipline, and these explanations are therefore by necessity reductive.

For a bit more, see “Requiem for Homo Economicus,” from the Journal of Markets & Morality 10, no. 2 (Fall 2007): 321-38, in which Edward O’Boyle argues, “Burying homo economicus and substituting homo socioeconomicus brings the basic unit of economic analysis out of the individualism of the seventeenth and eighteenth centuries into the personalism of the twentieth century.”

To these models, we ought also add homo religiosus, all the while recognizing the each are models and therefore limited, partial, and provisional relative to the comprehensive picture of humanity in imago Dei.

This week’s Acton Commentary from Rev. Gregory Jensen, “Finding the Balance: Privacy and the Civil Society,” is a thoughtful reflection on the place of privacy in our modern life.

I have recently made the claim that public persons, such as police officers and politicians, have a somewhat different claim to privacy than private persons.

This was especially in the context of controversy over the legality of videorecording police officers while on the job. Gizmodo follows up on a previous item (discussed here) with another one, linking to a Popular Mechanics article in which “Glenn Harlan Reynolds notes that mall cops may have a legal basis for asking you to put your camera away, public property (such as any sidewalk, street, or municipal area) is always fair game.”

The current situation is, apart from the special kinds of state-level legislation discussed in the previous post, that “Legally, it’s pretty much always okay to take photos in a public place as long as you’re not physically interfering with traffic or police operations.”

Thomas Jefferson’s long-forgotten theory of state nullification may have  found an ideal time for a resurgence, as the Tea Party and other groups advocate limited government as a solution to many of our current problems in health care, the economic crisis, our broken educational system, and the relentless expansion of government. The concept of nullification is simple, yet powerful: That individual states can and should refuse to enforce unconstitutional federal laws; and that the states, not the federal government, should have the final word on constitutional interpretation. The return of this “forbidden idea” (as its contemporary advocates sometimes describe it) represents not only an opportunity for small-government groups like the Tea Party to enact substantial change, but it also provides a unique opportunity those who are serious about a Christian social witness in public life to implement the principle of subsidiarity.

It is in this spirit that Dr. Thomas E. Woods, Jr. writes his newest book, Nullification: How to Resist Federal Tyranny in the 21st Century. Dr. Woods, who has authored two publications for the Acton Institute (the award-winning The Church and the Market and the monograph Beyond Distributism), as well as two New York Times bestsellers, now brings back the tradition of nullification into the public eye.

The seemingly radical idea of nullification flies in the face of nearly everything we have learned about the federal government and the Constitution: that federal authority always supersedes that of the states, that the Supreme Court has the final say on interpreting the Constitution, and that the only way to get rid of undesirable federal laws is to either have Congress repeal them or the Supreme Court overturn them.

However, Thomas Jefferson was convinced that if the federal government had a monopoly on interpreting the meaning of the Constitution, then there would be no certain way to constrain an unconstitutional expansion of its power. What if the constitutional system of checks and balances were to fail? What if, counter to the wishes of James Madison, ambition fails to counteract ambition, and the different branches of the federal government are able to cooperate in increasing the central government’s reach? Rather than wait two, four, or six years until the next election cycle, Jefferson thought, a more “rightful remedy” would be for states to simply declare that the laws in question violated the Constitution, and would not be enforced in said states.

He was not alone in this belief, as one can find the practice of nullification in the earliest years of the Republic. Kentucky and Virginia famously nullified the Alien and Sedition Acts of 1798. During Jefferson’s own presidency, northern states employed nullification against the total trade embargo imposed by the federal government. During the War of 1812, northern states once more passed resolutions nullifying any potential federal conscription acts. South Carolina passed resolutions nullifying the 1832 “tariff of abominations.” And in the 1850’s, free states frequently invoked nullification in an effort to combat unconstitutional aspects of the fugitive slave laws. Also interesting to note is that southern states did not invoke nullification to defend slavery.

To some extent, this practice continues today. As the Tenth Amendment Center thoroughly documents, dozens of states seek to propose legislation that would prohibit the federal government from enacting health insurance mandates, enforcing some federal gun lawsabusing the interstate commerce clause, and imposing cap-and-trade regulations, among other things. And though these efforts are still underway, supporters of nullification can already point to one success story: over two dozen states openly defied the Real ID Act of 2005, which imposed federal standards on state drivers’ licenses. Though the law is still “on the books,” so to speak, the federal government has given up on enforcement, due to the widespread and extremely overt opposition.

But what does all of this have to do with subsidiarity? At their core, the ideas of nullification and federalism that Dr. Woods invokes echo many of the same concerns that the Church raises in speaking of subsidiarity and the role of the state in society: that there needs to be a just division of responsibilities between different social orders. Social problems should be addressed at their lowest possible level. An unnecessary usurpation of power by, for example, the federal government, undermines the role that state governments should play in resolving some of their own domestic problems.

This principle is often invoked in religious discussion of public policy. The Catholic Church places such great emphasis on the principle of subsidiarity that the Compendium of the Social Doctrine of the Church lists subsidiarity as one of the four foundational principles of social teaching. The Church not only exhorts us to respect human dignity, respect the common good, and have solidarity with the poor, but also teaches that we should pursue these social goals in the proper context of subsidiarity:

It is impossible to promote the dignity of the person without showing concern for the family, groups, associations, local territorial realities; in short, for that aggregate of economic, social, cultural, sports-oriented, recreational, professional, and political expressions to which people spontaneously give life and which make it possible for them to achieve effective social growth [….]

On the basis of this principle, all societies of a superior order must adopt attitudes of help (“subsidium”) – therefore of support, promotion, development – with respect to lower-order societies. In this way, intermediate social entities can properly perform the functions that fall to them without being required to hand them over unjustly to other social entities of a higher level, by which they would end up being absorbed and substituted, in the end seeing themselves denied their dignity and essential place. (185-186)

One can certainly see a similar spirit in the intentions of the framers of the Constitution: the purpose of this founding document was not to provide a new kind of all-powerful entity lording over the states; rather, the states created the federal government in order to serve them as an instrument for promoting the common good – as the Compendium says, to provide “support, promotion, and development.” To discover this, one need look no further than the preamble of the Constitution:

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

In the same way, subsidiarity dictates that higher orders (e.g. the federal government) exist to promote and assist lower orders (e.g. states) in developing and protecting the common good. But a political system in keeping with the principle of subsidiarity should have appropriate mechanisms to ensure that the abuse and usurpation of power does not take place. This makes the need for a revival of nullification all the more urgent.

Today’s Tea Party-ers eye with skepticism the intrusions of the federal government into all sorts of matters: guns, education, charity, health care, business regulation, etc. They clamor for change, and will certainly have a substantial impact on the coming electoral cycle. But advocates of limited government should also reflect on which strategies are most effective at introducing real and substantial change. Both Thomas Woods and Thomas Jefferson contend that waiting for a benevolent Supreme Court, President, or Congress is not the right way. States cannot trust the federal government to police itself. They must take a direct role in reeling back federal power. Nullification is the best way to concretely implement the principle of subsidiarity, restore true federalism, and strengthen a truly Constitutional rule of law.

This week’s commentary by Rev. Gregory Jensen. Sign up for Acton News & Commentary here.

Finding the Balance: Privacy and the Civil Society

Privacy in our culture has come to serve not a deepening of community life but an ever deeper sense of social isolation.  Even otherwise laudable behavior is increasingly justified not by the goodness of what is done but by the modern sense of privacy.  Even among those who ought to know better, the Gospel is presented in terms that are almost wholly personal without any sense of its public character and demands.   Our sense of isolation from each other has become so profound that even to suggest that there is a human nature and that true happiness is only possible when we live in conformity to our nature, is seen a provocation and an assault on the radical autonomy of the individual.  

Paradoxically, when privacy is in the service of isolation it is also the source of what Peggy Noonan (The Eyes Have It) describes as our increasingly "exhibitionist culture."  She writes that more and more we "know things about each other (or think we do) that we should not know, have no right to know, and have a right, actually, not to know.”  While technology has a role to play here, Noonan sees the cause as rooted in the loss of what I would call the right sense of personal privacy.  Lose this, Noonan says, and "we lose some of our humanity; we lose things that are particular to us, that make us separate and distinctive as souls, as, actually, children of God."  And with this loss comes as well the loss of a truly civil society.  "We also lose trust, not only in each other but in our institutions, which we come to fear. “ 

Not that the modern sense of privacy is all bad.  Without privacy, without a door I can close (and the trust that you will respect that closed door) I cannot from time to time withdraw into solitude.  Rightly understood, privacy is the functional expression of solitude.

Solitude as a discipline of the spiritual life is both the antithesis and the cure for culture’s wild and destructive vacillations between isolation and exhibition.   Privacy serves, or rather should serve, those moments in my life when — like Jesus — I withdraw from the ebb and flow of daily life "to a quiet place" to pray (see Luke 9:10).  It is in these moments of recollection that I am able to restore myself and to re-evaluate and, if need be, correct how I go about meeting the myriad personal and professional demands of life.  And so just as privacy serves solitude, solitude in turn serves my wholesome involvement in the broader society.   

What critics, and even defenders, of the free market and democracy often forget is that both institutions are rooted in the solitude that privacy defends.   Neither social isolation — which sees my neighbor as a threat to my dignity — nor exhibitionism — which in the final analysis is merely another form of lust –is a sound anthropological foundation for a free market economy, democracy, or a civil society. So where ought we then to look?  

Rodney Stark (The Victory of Reason: How Christianity Led to Freedom, Capitalism, and Western Success) is correct when he argues that Western culture owes much of its success to Christianity in general and monastic life in particular.  Monasticism is a life of disciplined solitude in the service of community; it is also part of the shared cultural and spiritual patrimony of the Christian West and East.   As such it represents not only our best cultural self, it also can serve as a meeting place for Catholic, Protestant and Orthodox Christians as we work to respond to an increasingly secular and fragmented culture at home and the threats of Islamism worldwide. 

Though we need not ourselves be monks or nuns (though I think we do well to promote and encourage monastic life within our respective Christian communities), this should not stop us from seeing in monastic life a rich source of anthropological wisdom with which to respond to our culture’s deformed, and deforming, view of the relationship between the person and society.   Most importantly, among these is an inconvenient truth that even Christians are likely to overlook.   

Important as they are, economic activity, scientific research and even public policy shaped by the Gospel are insufficient.  True human freedom — personal and political — is a divine gift and so always outside our control.  Though he was not a monk, the Romanian Orthodox theologian, Dumitru Staniloae (1903-1993), gives voice to a central monastic insight for our time.  In his monograph, “Prayer and Holiness,” he writes that, "The man who does not pray remains a slave, enclosed in the complex mechanisms of the natural world and of the movements of his own passions by which he is dominated even more than by the world outside."  Individualism and exhibitionism, to say nothing of the brutishness and violence that are common in all areas of contemporary culture, are the symptoms of our servitude.   

In response to this self-imposed slavery and for the sake of a truly humane and civil society, we must cultivate in ourselves a right sense of privacy and so of solitude and community life. Monasticism is a tangible sign that such a life of solitude and of civic engagement is possible. It reminds us as well that we must place our great material and cultural wealth and technological prowess at the service of something greater than our own comfort or economic success.  

His Eminence George Cardinal Pell, the Archbishop of Sydney, who delivered the keynote address at Acton’s 2004 annual dinner (full text here), has recently produced two notable commentaries: the first on global warming, the second on the Christian foundations of modern Western Civilization.

George Cardinal Pell, Archbishop of Sydney, Australia

First, the Cardinal responds to critics of his view that the frenzy over the magnitude of man-made climate change is overblown:

Vanishing Challenge

By + Cardinal George Pell
Archbishop of Sydney
18 July 2010

Humanly induced climate change was once “the greatest moral challenge of our age”.  No longer.  The hullaballoo is much less.

A politician referred my February article on global warming to the Bureau of Meteorology for comment. In a roundabout way they conceded the truth of most of my factual statements, but ducked the issue of Roman warming and claimed that “all available hemispheric to global scale analyses” suggest recent decades have been warmer than in the Middle Ages.  This is misleading.

Professor Ian Plimer, in Heaven and Earth: Global Warming the Missing Science (Connorcourt, 2009) cites the scientific evidence from pollen studies, drill cores and lake sediments to show that temperatures were 2 to 6°C warmer around the world in the period from 250BC to 450AD (the Roman Warming). Records from the time report citrus trees and grapes being grown in England as far north as Hadrian’s Wall, and olive groves on the Rhine. It was wetter and warmer, but sea levels were also lower. Areas which are now either forests (because it is cooler) or deserts (because it is drier – for example, the Roman provinces of North Africa) were growing crops.

Professor Plimer also cites scientific evidence from the Middle Ages.  Tree rings, boreholes, sediment cores from oceans and flood plains, pollen studies, peat bogs, ice cores, fossils and carbon chemistry show that temperatures were warmer throughout the world during 900-1300AD than they are now, by 1-2.5°C in different places. The amount of land used for agriculture increased. In Greenland, cattle and sheep were run and crops like barley were grown. Grapevines were grown in Newfoundland, and vineyards in Germany were grown 220 metres higher than the maximum altitude today. Roots and stumps in the Polar Urals suggesting the tree line there was 30 metres higher in 1000AD. The North Atlantic was free of ice, allowing the Vikings to travel to North America.

Warmer temperatures and higher rainfall during the Medieval Warming enabled societies and economic life to flourish. In Europe it saw the growth of cities, the establishment of universities, and a boom in cathedral building. China’s population doubled in the course of a century and records from China and Japan also indicate that they experienced warmer temperatures. The Medieval Warming also brought higher levels of water in lakes and rivers.

There was no industry in Roman or Medieval times.

Why were the temperatures higher?  What were the causes then and now?

Next are remarks delivered at a recent program of the Institute of Public Affairs, a prominent Australian think tank. Here, Cardinal Pell reminds us that the heritage of Western Civilization comes from its uniquely Christian character:

The Heritage of Western Civilization

Remarks at the launch of the Institute of Public Affairs’
Foundations of Western Civilisation Program
Stonington Mansion, Melbourne

By + Cardinal George Pell
Archbishop of Sydney

It is a privilege to speak at the launch of the IPA’s Foundations of Western Civilisation Program tonight, and I propose to begin my few words on “The Heritage of Western Civilization” by speaking about China. This is not because I believe that China must achieve economic supremacy (twenty years ago we were ascribing that honour to Japan) but because China is a radically different culture, nourished for two thousand years by the teachings of Buddha and Confucius before the destructive barbarism of Mao and the Red Guards; a nation which is now searching for the secrets of Western vitality and for a code or codes to provide decency and social cohesion that is compatible with economic development.

Let me give two examples, admittedly only two straws in an vast cyclone. (more…)

In the background of this month’s 11th General Assembly of the Lutheran World Federation, it’s important to recall the recent history of global Lutheranism.

The basic context is that Lutheranism has been self-understood as historically associated with social quietism, particularly as expressed in the church’s impotency in the face of the Nazi menace. One approach in answer to this has been to become correspondingly active in social causes.

This is, at least in part, we see such an emphasis on social justice issues at Lutheran ecumenical gatherings over the last few decades. This current gathering, for instance, is committed to focusing on hunger issues.

As the introductory ENI story relates, this move from social quietism to social activism is constitutive of the Lutheran ecumenical movement’s self-understanding.

German finance minister Wolfgang Schäuble said in Stuttgart yesterday, “It has been observed that the Lutheran heritage in Germany has tended to encourage individuals to be obedient subjects rather than active citizens.”

“Germans had to learn through a painful history that good government is the responsibility of all citizens. Protestant Germans in their majority took a long time to understand that this was also what their Christian faith demanded of them,” Schäuble told a 1200-strong ecumenical congregation.

Dietrich Bonhoeffer

Dietrich Bonhoeffer (1906-1945)

The ENI piece specifically cites Dietrich Bonhoeffer and his involvement in the Abwehr conspiracy, whose climax was reached in the Stauffenberg assassination attempt of July 20, 1944. Bonhoeffer certainly does have a great deal to teach us about social engagement, as his deep reflections on the nature of social life, from his first theological dissertation (Sanctorum Communio), to his reflections on communal life together at the theological seminary in Finkenwalde, to his Ethics.

What we see in Bonhoeffer, and what I try to communicate in my use of his work in the concluding sections of Ecumenical Babel, is a balanced approach that does not allow for secularization between church life and work life, for instance. But neither does it allow for the opposite error, the substitution of social activism for the Gospel proclamation itself.

This is the risk that Lutheran social engagement has faced over the last few decades, and the trap into which the LWF has often fallen. I pray that the invocation of the prayer for our “daily bread” at this gathering in Stuttgart will take up a balanced approach to work and wealth. But as I show in Ecumenical Babel, there is little precedent in recent history to suggest such balance.

Blog author: jcouretas
Tuesday, July 20, 2010
By

The birth of a new genre: econo-psychobilly bouzouki music. Opa, you all! For more great Merle Hazard tunes, check out his website. They don’t call him “The Man in Beige” for nothing. PBS NewsHour has more on the Nashville crooner. (HT: Calculated Risk)

Today marks the opening of the 11th General Assembly of the Lutheran World Federation, held this time in Stuttgart. Today is also the 66th anniversary of the failed Stauffenberg assassination attempt on the life of Adolf Hitler.

There will be much more on the LWF assembly and it social witness in the coming days. The assembly’s theme is, “Give us today our daily bread,” and the meeting promises to focus on hunger issues. I’ll be paying special attention to the engagement of Dietrich Bonhoeffer, the German theologian who was involved in the Stauffenberg plot, with the ecumenical movement in the 1930s and what we can learn about it today.

Follow along here on the PowerBlog. But for a basic primer on recent LWF pronouncements, in the context of the broader ecumenical witness, be sure to check out my new book, Ecumenical Babel: Confusing Economic Ideology and the Church’s Social Witness. Read an ENI piece on the opening of the assembly after the break.
(more…)

The extent and persistence of the global economic and financial crisis has caused many people to start asking if there is any alternative to the current monetary system of fiat money overseen by central banks which enjoy varying — and apparently diminishing — degrees of independence from politicians who seem unable to resist meddling with monetary policy in pursuit of short-term goals (such as their reelection).

Most arguments about the respective merits of fiat money, private money, or the gold standard are couched almost entirely in terms of economic efficiency. Over at Public Discourse, however, Acton’s Research Director Samuel Gregg has penned an article outlining the principled case for a return to the classical gold standard. Gregg draws upon economic history and ethical analysis to argue that there is a strong more-than-economic case for the classical gold standard that rarely receives much attention. As Gregg writes:

There were several economic advantages to the gold standard. . . . A number of principled considerations were, however, also operative. The gold standard placed a high premium on economic security by reducing the uncertainty and risk that flows from fluctuations in the value of money that have nothing to do with the relative valuation of different goods and services. . . .

Another commitment at stake was the conviction that stable money meant greater economic prosperity for increasing numbers of people. Greater monetary certainty spurred productivity and investment, not least because many long-term contracts benefited from a confidence that prices would remain relatively constant over time. Then there were the ways in which the gold standard bolstered the economic well-being of particular marginalized groups. Monetary stability helps, for example, those who lack the financial sophistication to navigate the shoals of inflation, or who are on fixed incomes (e.g., the elderly and disabled).

At the same time the gold standard also encouraged governments to promote the common good instead of narrow sectional interests. Within nation-states, for instance, the gold standard diminished opportunities for the state to manipulate monetary policy in order to favor those with an interest in inflationist policies.

Likewise, the gold standard also generated a commitment on the part of governments to promoting the international common good. As the German economist Wilhelm Röpke once wrote, the gold standard relied upon the unwritten agreement of central banks and governments “to behave in matters of monetary and credit policy in such a way that this fixed and free coupling remained an undisputed permanent institution, irrespective of trade fluctuations”. This required central banks and governments to prioritize the global economy’s long-terms needs over the short-term exigencies of national economies. It also entailed a willingness to resist popular pressures to revert to a type of monetary nationalism in the face of the fluctuations in employment and growth sometimes generated by the gold standard’s adjustment mechanisms.

There is, Gregg notes, bound to be considerable opposition to any move away from fiat money. It’s hard to imagine, for instance, politicians, central banks, or Keynesian-inclined economists being very willing to give up a tool that — or so they believe — is a vital element of macroeconomic management. Gregg points out that there are also plenty of groups with a vested interest in the type of easy money policies (what’s euphemistically called “quantitative easing” these days) which are always an option under fiat money regimes.

Despite this opposition, Gregg says that going back to gold is certainly worth a second look — if only because no one seems especially satisfied with the present system.

For more from Gregg on this subject, see The Gold Standard: A Principled Case.

Blog author: jballor
Tuesday, July 20, 2010
By

Wired magazine had a lengthy feature in 2004 on a new brand of transit design, specifically the kind that eschews signage and barriers, preferring instead more subtle signals.

In “Roads Gone Wild,” Tom McNichol profiles Hans Monderman (now deceased), “a traffic engineer who hates traffic signs.”

Monderman’s point of departure is that human interaction (e.g. gestures, eye contact) are preferable to explicit signage or signals that indirectly excuse us from conscious concern about our fellow travelers. “The trouble with traffic engineers is that when there’s a problem with a road, they always try to add something,” Monderman says. “To my mind, it’s much better to remove things.”

Monderman's Drachten Intersection

Drachten's busiest intersection after Hans Monderman.


Monderman’s design philosophy is to embrace chaos, and it’s effective because it allows for a kind of spontaneous ordering to occur. As McNichol writes, “The approach is radically counterintuitive: Build roads that seem dangerous, and they’ll be safer.” It is counterintuitive, but it is in accord with what we know about human nature.

Human beings, when faced with danger, instinctively and naturally slow down and assess the threats with heightened sense and attention. Indeed, self-preservation is a constitutive element in the natural law.

There is still an element of planning in Monderman’s designs, but what is remarkable about them is that they embrace what we know about human beings in toto and not for the purposes of some engineered abstraction (such as homo automobilus or some such).

The kind of planning that allows for free and spontaneous interaction and creates space in which this can happen within the larger framework of the rule of law, in markets as well as traffic intersections, end up being the best because they account for the complexities of human nature. The kind of planning that relies on rigid rules and regulatory edifices, whether on Wall Street or surface streets, tend to incentivize the objectification of human interaction, in which we treat each other as simple means, obstacles, impediments, or resources to be plundered.

Recognition of the other as having dignity, as well as the corresponding power to do us good or ill and their own responsibility to act accordingly, is constitutive of a superior design approach.

This kind of approach works, as I’ve said, because we instinctively recognize the worth of other human beings. The same reason that a bus filled with people must wait for a single person to cross an intersection is the same reason that the rule of law must limit majority rule, or absolute democracy. The rights of the individual must be respected, even when the majority must otherwise wait or acquiesce. A bus full of people on their way to a destination must often first wait for a single individual to go on their way.

In political economy, as Lord Acton writes, “The true natural check on absolute democracy is the federal system, which limits the central government by the powers reserved, and the state governments by the powers they have ceded.” And in traffic economy, the true natural check on absolute democracy might well be the spontaneous order arising out of a seemingly chaotic intersection.