Archived Posts May 2011 - Page 4 of 5 | Acton PowerBlog

Writing in the Sacramento Bee, Margaret A. Bengs cites Rev. Robert A. Sirico’s Heritage Foundation essay “The Moral Basis for Economic Liberty” in her column on faith communities and government budget battles.

As a priest, Sirico has met many entrepreneurs “who are disenfranchised and alienated from their churches,” with often little understanding by church leaders of the “vocation called entrepreneurship, of what it requires in the way of personal sacrifice, and of what it contributes to society.”

This lack of understanding, he believes, is due to the collection basket economic model which “tends to foster a view of the economic world as a pie that needs to be divided.” The entrepreneur, instead, engages in producing wealth, not redistributing it.

“Entrepreneurs create jobs, reduce human suffering, discover and apply new cures, bring food to those without, and help dreams become realities,” he says. In contrast, “the welfare state is too often thought of in morally favorable terms, but its social consequences, however well-intended, can be largely damaging.”

Read “Putting faith in economics to help the poor” in the Sacramento Bee.

Also see Acton’s Principles for Budget Reform and download the free “What Would Jesus Cut … from the Constitution” poster.

Blog author: lglinzak
posted by on Monday, May 9, 2011

In an article appearing on EWTN News, Acton Director of Research, Samuel Gregg, is interviewed on rising food prices and the effect on the developing world. In this article, Dr. Gregg contributed to a broad discussion on the many factors contributing to the rising food prices.

He advocates for a free market economy in agriculture by discussing the effects agricultural subsides in Europe and the United State, and how these market distortions contribute to stifling the growth of agriculture in the developing world. Furthermore, the effects of the oil industry on food prices is also discussed along with Pope Benedict’s call for the need to address the problems of food insecurity in Caritas in Veritate.

Developing world’s food crisis seen as a ripple effect of over-regulation

By Benjamin Mann

The dramatic rise in global food prices was high on the agenda of the 2011 World Economic Forum on Africa, held from May 4–6 in Cape Town, South Africa. According to a leading Catholic economist, excessive government regulations are to blame for the rise in prices.

A complex combination of factors – including natural disasters and higher oil prices, as well as a rising standard of living in countries like China, India and Brazil – have made food less affordable in recent months.

The United Nations’ Food and Agricultural Organization has warned that the “food price shock” could have devastating effects upon the world’s poorest people.

At meetings in Cape Town, South Africa this week, African leaders discussed a “road map” to help the continent cope with rising prices through market-based approaches that would encourage local agriculture.

Some factors behind higher food prices, such as natural disasters, cannot be controlled. But Dr. Samuel Gregg, an economist at Michigan-based Acton Institute for the Study of Religion and Liberty, said other factors – especially agricultural subsidies and the manipulation of oil supplies – were preventing poorer countries from bringing their productive capacities to bear in the global market.

The result, he told EWTN News on May 6, is an under-supply of food, and higher prices.

“All the subsidies that go into agriculture – through things like import taxes and tariffs, as well as direct subsidies – have the paradoxical effect of reducing the incentive for investment in agriculture in developing countries,” Gregg observed.

Without the ability to sell their products at competitive prices on the global market, these countries end up producing less food, and attracting fewer investors.

“They end up saying, ‘We can’t compete because of subsidies in the European Union and the United States.’ Consequently, the supply of food starts to be reduced, because there isn’t the incentive for agricultural investment.”

“This effort to protect American and European farmers has the unintended consequence of reducing the supply of agricultural products from other people.”

He said farm subsidies, going mainly to large corporations rather than individual growers, were a “very good example” of how “a government program can have a completely unintended negative effect” on a critical area of the world economy.

If the barriers to competition were lifted, Gregg said, developing countries could attract more investment and increase their own productive capacities, to cope with global demand and bring food prices down.

But agricultural subsidies have the backing of powerful interest groups, and are often perceived as vital to the national interest.

Gregg also holds oil-exporting nations of OPEC responsible for high fuel prices that translate into more expensive food.

“The energy sector of the economy is not a free market – it’s a cartel,” he stated. “That’s something to keep in mind with all discussion about energy prices. This is why we worry about what OPEC is going to set as the price for gas, or for the production of barrels of oil.”

“It’s not the market that is controlling the price, for the most part. Generally speaking, it’s a cartel – which means that OPEC and other oil-producing countries introduce a whole range of price-distortions into the energy sector, resulting in higher prices.”

Oil prices, he said, “don’t reflect the true state of supply and demand.” Rather, Gregg said, they tend to reflect the will of countries exporting oil, and the inefficiency of frequently nationalized oil production.

Elsewhere, government regulations surrounding the refinement of oil into gas also play a role in raising prices, when refining capacity fails to keep pace with crude oil supply.

“There’s plenty of oil,” Gregg stated. “The problem is, there’s a disparity between supply and demand.” Meanwhile, this imbalance in the oil market has a ripple effect. “Just as energy prices go up,” he explained, “so do food costs.”

Another obstacle to meeting rising demand for food may come from ideological opposition to genetically-modified crops.

“There are all sorts of restrictions in place around the world, upon the development of genetically modified food,” Gregg noted. Genetic modification is highly controversial, and skeptics worry such crops could harm local ecosystems or human health.

But Gregg said that these concerns had to be weighed against the world’s urgent food needs, given that genetic modification could enable crops to be grown “in conditions where they might not otherwise be able to be produced.”

Many of these crops are also designed to resist natural occurrences – such as droughts, floods, and disease – that destabilize food prices.

“There’s no question that if more countries were enabled by law to engage in genetically modified agriculture, the supply of food would go up, and prices would come down,” he observed.

Gregg’s advocacy of what he called a “true free market in agriculture,” geared toward attracting investment in the developing world, reflects priorities that Pope Benedict XVI outlined in his 2008 encyclical “Caritas in Veritate.”

In that encyclical, the Pope said that “the problem of food insecurity” had to be addressed by “eliminating the structural causes that give rise to it, and promoting the agricultural development of poorer countries.”

“This can be done,” the Pope wrote, “by investing in rural infrastructures, irrigation systems, transport, organization of markets, and in the development and dissemination of agricultural technology.”

Pope Benedict stated said the developing world’s most urgent need in this area was “a network of economic institutions capable of guaranteeing regular access to sufficient food.”

Gregg believes a general draw-down of government involvement in agriculture, as well as energy, would allow these kinds of economic institutions to develop locally and compete globally.

The result would be a boost in developing countries’ food production capacity, and more affordable food for the world.

“Obviously you need some kind of regulatory framework,” Gregg said. “But if it were a less onerous regulatory framework, and different groups weren’t trying to influence the process for political and ideological reasons, I think you’d find that the price of food – and the price of energy – would fall.”

Read more: http://ewtnnews.com/catholic-news/World.php?id=3153#ixzz1LrqsAFKh

Blog author: jballor
posted by on Monday, May 9, 2011

David Lohmeyer turned up this excellent clip from the original Star Trek series:
Kirk opens the clip by referencing the Nazi “leader principle” (das Führerprinzip). Soon after Hitler’s election as chancellor in 1933, the German theologian Dietrich Bonhoeffer gave a (partial) radio address and later lectured publicly on the topic of the “leader principle” and its meaning for the younger generation. These texts are important for a number of reasons, not least of which is that Bonhoeffer compares the office of “leader” to a kind of inherent law of life (or natural law) that determines whether or not the leader is actually meeting his responsibilities and obligations. Thus the leader is not beyond the law, as the Nazi version of the principle held.

 

For “men seeking absolute power,” as Spock puts it, this rule of law must be denied. Therefore the reason that “absolute power corrupts absolutely” is that it arrogates power to a creature that is beyond its inherent nature as creature and distinct from and beholden to a creator. It makes a man into a god.

Thus, writes Bonhoeffer,

People and especially youth will feel the need to give a leader authority over them as long as they do not feel themselves to be mature, strong, responsible enough to themselves fulfill the demands placed in this authority. The leader will have to be responsibly aware of this clear restriction of his authority. If the leader understands his function differently from that thus established, if the leader does not repeatedly provide the led with clear details on the limited nature of the task and on their own responsibility, if the leader tries to become the idol the led are looking for–something the led always hope from their leader–then the image of the leader shifts to one of a misleader, then the leader is acting improperly both toward the led as well as toward himself.

The leader’s function must be balanced, Bonhoeffer continues, with the other orders of the world: “The leader must lead the led into responsibility toward the social structures of life, toward father, teacher, judge, state. The leader must radically reject the temptation to become an idol, that is, the ultimate authority of the led.”

This is, as Bonhoeffer notes, the perennial temptation of those with political power, and it follows from the basic fallenness of humanity. Spock says rightly, “Your whole earth history is made up of men seeking absolute power.” We are, as fallen creatures, constantly creating idols, out of ourselves and our surroundings. As Bones McCoy puts it, when “a man holds that much power, even with the best intentions, [he] just can’t resist the urge to play God.”

It is comforting, I think, that Lord Acton’s wisdom survives into the 23rd century: “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”

The miraculous post-Soviet revival of the Russian Orthodox Church, all but destroyed by the end of the Stalinist purges in the 1930s, is one of the great stories of 21st Century Christianity. This revival is now focused on the restoration of church life that saw its great institutions and spiritual treasures — churches, monasteries, seminaries, libraries — more or less obliterated by an aggressively atheist regime. Many of the Church’s best and brightest monks, clergy and theologians were martyred, imprisoned or forced into exile. Yet, plans are now underway to build 200 churches in the Moscow area alone.

The Church’s renewal is set against Russia’s steep population decline and grave social ills including alcoholism, the disintegration of the family, what amounts to an open season on journalists, and an immense and growing corruption problem at all levels of government and society. Building new churches is one thing; getting believers to fill them and then effect a social transformation by following the Great Commandment will be a more difficult climb. “Acquire a peaceful spirit, and around you thousands will be saved” — St. Seraphim of Sarov.

It is perhaps impossible to comprehend, without having lived through it, the depths of destruction and despair that Russia had sunk to under the Soviets. Read Aleksandr Solzhenitsyn’s 1974 essay “Live Not By Lies” and you begin to comprehend, albeit at a great distance, something about a system that destroyed tens of millions of people:

Things have almost reached rock bottom. A universal spiritual death has already touched us all, and physical death will soon flare up and consume us both and our children — but as before we still smile in a cowardly way and mumble without tongues tied. But what can we do to stop it? We haven’t the strength.

Hilarion

The public face of the Russian church is lately, for much of the global media, an Oxford-educated bishop who is also a composer of music, Metropolitan Hilarion of Volokolamsk. His web site is here. As the director of external relations for the Moscow Patriarchate, he is a much traveled spokesman for the largest and most influential Orthodox Church in the world with more than 150 million members. Acton Research Director Samuel Gregg included Hilarion in what he referred to as Pope Benedict’s “creative minority.”

Christianity Today deputy managing editor Timothy C. Morgan interviewed Hilarion on the bishop’s recent trip to Washington. Here’s an excerpt and, following that, some recent links to interviews where Hilarion talks about a unified Christian witness on social problems. Finally, a link to his condemnation of Stalin as a “monster.”

CT: What role can the Russian Orthodox Church play in world evangelization?

Hilarion: Christ created his church not just for private use but also for missionary purposes, and the church has a missionary imperative that must be embodied in the concrete forms of preaching and evangelizing.

Some say you can be a practicing Christian in your home and your family, but you should in no way exhibit your Christian commitments in your public life, especially if you are a politician. I believe that a Christian should be a Christian everywhere. And if he is a Christian and a politician at the same time, then his political agenda should be motivated by Christian values.

In our country, some people say the church exists in order to provide certain services to people when they need them: to baptize children, to marry couples, to organize funerals, and to do services in the church.

I believe that the role of the church is much more inclusive. For example, very often nowadays our church will publicly express positions on what’s happening in the country.

Some people ask, “Why does the church interfere? It’s not their business.” We believe that the church can express its opinion on all aspects of human life. We do not impose our opinions on the people, but we should be free to express them. And people will have to choose whether to follow or not to follow, whether to listen to what we say or to ignore it.

CT: Church leaders worldwide are challenged by secularism and Islam. Which do you see as a greater threat to global Christianity?

Hilarion: Secularism.

If we speak about Islam (and of course if we mean moderate Islam), then I believe there is the possibility of peaceful coexistence between Islam and Christianity. This is what we have had in Russia for centuries, because Russian Islam has a very long tradition. But we never had religious wars. Nowadays we have a good system of collaboration between Christian denominations and Islam.

The picture is different in many other countries, and recently, even the European Parliament publicly recognized that Christians are persecuted and discriminated against in many countries, including in Islamic countries. This is a problem we have to address. Yet I believe that on many essential points, especially in many aspects of moral teaching, Christianity and Islam are allies, and we can cooperate in those fields.

Secularism is dangerous because it destroys human life. It destroys essential notions related to human life, such as the family. One can argue about the role of the church. One can even argue about the existence of God; we cannot prove that God exists to those who don’t want to believe that God exists. But when the difference in the world outlook touches very basic notions such as family, it no longer has to do with theological truths; it has to do with anthropological issues. And our debate with secularism is not about theology; it’s about anthropology. It’s about the present and the future of the human race. And here we disagree with atheist secularism in some areas very strongly, and we believe that it destroys something very essential about human life.

Further reading:

An alliance of faith
Moscow Patriarchate calls for strategic alliance with Catholic Church
Interview with Russia Today

Archbishop Hilarion on Christian Unity
‘We should not pretend we are close to solving this problem’
Interview with National Catholic Register

Metropolitan Hilarion thanks Catholics for their active assistance rendered to Orthodox believers abroad
Interview with Interfax

Address by Metropolitan Hilarion of Volokolamsk Chairman of the Moscow Patriarchate’s Department for External Church Relations to the Annual Nicean Club Dinner (Lambeth Palace, 9 September 2010)
Web site of the Dept. of External Relations, Russian Orthodox Church

Russian archbishop’s censure of Stalin as “a monster” makes waves
By Sophia Kishkovsky, ENI

In a special report, the American Spectator has published Acton Research Director Samuel Gregg’s new article on the “civilizational agenda” of Pope Benedict XVI. Special thanks also to RealClearReligion for linking the Gregg article.

Benedict XVI: In No One’s Shadow

By Samuel Gregg

It was inevitable. In the lead-up to John Paul II’s beatification, a number of publications decided it was time to opine about the direction of Benedict XVI’s pontificate. The Economist, for example, portrayed a pontificate adrift, “accident-prone,” and with a “less than stellar record” compared to Benedict’s dynamic predecessor (who, incidentally, didn’t meet with the Economist‘s approval either).

It need hardly be said that, like most British publications, the Economist‘s own record when it comes to informed commentary on Catholicism and religion more generally is itself less than stellar. And the problems remain the same as they have always been: an unwillingness to do the hard work of trying to understand a religion on its own terms, and a stubborn insistence upon shoving theological positions into secular political categories.

Have mistakes occurred under Benedict’s watch? Yes. Some sub-optimal appointments? Of course. That would be true of any leader of such a massive organization.

But the real difficulty with so much commentary on this papacy is the sheer narrowness of the perspective brought to the subject. If observers were willing to broaden their horizons, they might notice just how big are the stakes being pursued by Benedict.
This pope’s program, they may discover, goes beyond mere institutional politics. He’s pursuing a civilizational agenda.

And that program begins with the Catholic Church itself. Even its harshest critics find it difficult to deny Catholicism’s decisive influence on Western civilization’s development. It follows that a faltering in the Church’s confidence about its purpose has implications for the wider culture.

That’s one reason Benedict has been so proactive in rescuing Catholic liturgy from the banality into which it collapsed throughout much of the world (especially the English-speaking world) after Vatican II. Benedict’s objective here is not a reactionary “return to the past.” Rather, it’s about underscoring the need for liturgy to accurately reflect what the Church has always believed — lex orandi, lex credendi — rather than the predilections of an aging progressivist generation that reduced prayer to endless self-affirmation.

This attention to liturgy is, I suspect, one reason why another aspect of Benedict’s pontificate — his outreach to the Orthodox Christian churches — has been remarkably successful. As anyone who’s attended Orthodox services knows, the Orthodox truly understand liturgy. Certainly Benedict’s path here was paved by Vatican II, Paul VI, and John Paul II. Yet few doubt that Catholic-Orthodox relations have taken off since 2005.

That doesn’t mean the relationship is uncomplicated by unhappy historical memories, secular political influences, and important theological differences. Yet it’s striking how positively Orthodox churches have responded to the German pope’s overtures. They’ve also become increasingly vocal in echoing Benedict’s concerns about Western culture’s present trajectory.

But above all, Benedict has — from his pontificate’s very beginning — gone to the heart of the rot within the West, a disease which may be described as pathologies of faith and reason.

In this regard, Benedict’s famous 2006 Regensburg address may go down as one of the 21st century’s most important speeches, comparable to Alexander Solzhenitsyn’s 1978 Harvard Address in terms of its accuracy in identifying some of the West’s inner demons.

Most people think about the Regensburg lecture in terms of some Muslims’ reaction to Benedict’s citation of a 14th century Byzantine emperor. That, however, is to miss Regensburg’s essence. It was really about the West.

Christianity, Benedict argued at Regensburg, integrated Biblical faith, Greek philosophy, and Roman law, thereby creating the “foundation of what can rightly be called Europe.” This suggests that any weakening of this integration of faith and reason would mean the West would start losing its distinctive identity. In short, a West without a Christianity that integrates faith and reason is no longer the West.

Today, Benedict added, we see what happens when faith and reason are torn asunder. Reason is reduced to scientism and ideologies of progress, thereby rending reasoned discussion of anything beyond the empirical impossible. Faith dissolves into sentimental humanitarianism, an equally inadequate basis for rational reflection. Neither of these emaciated facsimiles of their originals can provide any coherent response to the great questions pondered by every human being: “Who am I?” “Where did I come from?”
“Where am I going?”

So what’s the way back? To Benedict’s mind, it involves affirming that what he recently called creative reason lies at the origin of everything.

As Benedict explained one week before he beatified his predecessor: “We are faced with the ultimate alternative that is at stake in the dispute between faith and unbelief: are irrationality, lack of freedom and pure chance the origin of everything, or are reason, freedom and love at the origin of being? Does the primacy belong to unreason or to reason? This is what everything hinges upon in the final analysis.”

It’s almost impossible to count the positions Benedict is politely assailing here. On the one hand, he’s taking on philosophical materialists and emotivists (i.e., most contemporary scholars). But it’s also a critique of those who diminish God to either a Divine Watchmaker or a being of Pure Will.

Of course none of this fits into sound-bites. “Pope Attacks Pathologies of Faith and Reason!” is unlikely to be a newspaper headline anytime soon. That, however, doesn’t nullify the accuracy of Benedict’s analysis. It just makes communicating it difficult in a world of diminished attention-spans and inclined to believe it has nothing to learn from history.

So while the Economist and others might gossip about the competence of various Vatican officials, they are, to their own detriment, largely missing the main game. Quietly but firmly Benedict is making his own distinct contribution to the battle of ideas upon which the fate of civilizations hang. His critics’ inability to engage his thought doesn’t just illustrate their ignorance. It also betrays a profound lack of imagination.

Blog author: jballor
posted by on Friday, May 6, 2011

United Methodist Salem OregonWe might need an update to the children’s rhyme: “Here is the church, / here is the steeple, / open the doors, / and see all the people.”

Before I got wrapped up in ongoing conversations here, there, and seemingly everywhere about the nation’s budget, I noted that the ripple effects from the economic downturn were beginning to hit churches in a serious way. Christianity Today passes along a piece that speaks to a much more particular phenomenon: the decline of church steeples in America.

There are a number of contributing factors. The economic downturn has affected giving, which has in turn forced churches to make hard decisions about maintenance. In other cases, churches that are most likely to have traditional buildings (including steeples), are losing membership. As Cathy Lynn Grossman writes, “Architects and church planners say today’s new congregations meet in retooled sports arenas or shopping malls or modern buildings designed to appeal to contemporary believers turned off by the look of old-time religion.” Goodbye, steeple. Goodbye, people.

Some other interesting factors include the potential decline of steeplejacking as a profession. “It’s sad. I’m not doing the same thing my grandfather did. We used to do six to eight steeples a year—painting, repairing, waterproofing, regilding the crosses on top. Now I do one or two a year,” said third-generation steeplejack Jim Phelan. Other churches are leasing their steeple space to serve as cell phone towers, which can bring in tens of thousands of dollars a year.

Speaking of the budget debates, I have asserted the importance of Christian charity in relieving the burdens of the welfare state, and also have argued that the local church needs to be the primary locus of Christian giving. But I’ve also noted that even though Christian charity begins with the local church, it doesn’t end there. A discussion of this point, especially as related to the idea of tithing, is going on over at Scot McKnight’s Jesus Creed blog.

Much of the discussions I’ve been involved in over recent months that have focused on the federal budget have involved some basic assumptions about what the Christian view of government is. Sometimes these assumptions have been explicitly conflicting. Other times the assumptions have been shown as the result of exegetical commitments about what Scripture says.

The Belgic Confession of 1561This is, for instance, one of the points that came up right at the conclusion of the panel discussion about intergenerational justice at AEI a few weeks ago. The question was essentially whether and how we can move from the example given in the Old Testament nation of Israel to conclusions about the role of governments today.

There’s much to be said on this point, and it is an important hermeneutical question. What I will point out here, however, is that there are significant and noteworthy traditions of how to do precisely this.

In this regard, I’ll point to this year’s 450th anniversary of a major confessional document for the Reformed tradition, the Belgic Confession. Article 36 of the confession, which has had its own share of interesting interpretive history, lays out the basic role of the civil government:

We believe that because of the depravity of the human race our good God has ordained kings, princes, and civil officers. He wants the world to be governed by laws and policies so that human lawlessness may be restrained and that everything may be conducted in good order among human beings.

For that purpose he has placed the sword in the hands of the government, to punish evil people and protect the good.

The clear emphasis on the task of the civil government here isn’t on some undifferentiated concept of “justice” or comprehensive shalom but rather a kind of procedural justice focused on “good order” and retributive justice, for which reason God “has placed the sword in the hands of the government.”

The Bible, and the Old Testament in particular, teach that the ruler is to “do justice.” But what that means precisely is not self-evident. Your understanding depends in part on whether and to what extent you think the “political” sphere has limits, or whether you distinguish between the “justice” that is appropriate to different spheres. It is not obvious that this biblical injunction to “do justice” means that the federal government is required to provide direct material assistance to the poor on an ongoing and permanent basis.

The Belgic Confession outlines the limits of the civil magistrates’ power and authority: “They should do this while completely refraining from every tendency toward exercising absolute authority, and while functioning in the sphere entrusted to them, with the means belonging to them.” As the Reformed tradition celebrates the 450th anniversary of the Belgic Confession this year, this is a perspective that warrants greater attention and fidelity.

Blog author: lglinzak
posted by on Wednesday, May 4, 2011

Everywhere we look we are facing rising prices. We find them at the gas pumps and now we see them at our supermarkets. Food prices are climbing, and just like gas prices, they are having broadly felt adverse effects on Americans.

The Wall Street Journal sat down with C. Larry Pope, the CEO of Smithfield Foods Inc., the world’s largest pork processor and hog producer by volume, to discuss the rising food prices and how they are affecting his business. Pope attributes the increase in food prices to corn prices and the ethanol industry:

It’s also a business under enormous strain. Some “60 to 70% of the cost of raising a hog is tied up in the grains,” Mr. Pope explains. “The major ingredient is corn, and the secondary ingredient is soybean meal.” Over the last several years, “the cost of corn has gone from a base of $2.40 a bushel to today at $7.40 a bushel, nearly triple what it was just a few years ago.” Which means every product that uses corn has risen, too—including everything from “cereal to soft drinks” and more.

It is also important to note that, while Pope does not go into great detail, he points to the depreciating dollar as playing a role in inflated food prices.

Pope says the majority of his customers will be hurt by rising food prices:

“Maybe to someone in the upper incomes it doesn’t matter what the price of a pound of bacon is, or what the price of a ham, or the price of a pound of pork chops is,” he says. “But for many of the customers we sell to, it really does matter.” Workers can share cars when the price of oil rises, he quips, but “you can’t share your food.”

As food prices rise, what are most people expected to do? Many are on a limited budget and where will they cut back? Increasing food prices may also result in people turning to cheaper less nutritious food. Lora Iannotti, public health expert and professor at Washington University in St. Louis, explains how rising food prices lead to nutritional problems for everyone—especially the most vulnerable:

“During a food price crisis, households moved away from ‘luxury’ food items such as meat, fish and dairy products to poorer quality food,” she says.

Data from nationally representative household budget surveys show that during a food crisis, calorie intake is reduced by an average eight percent from pre-crisis levels, equally affecting rural and urban areas.

“We are particularly concerned for families with young children,” Iannotti says. “When you have a reduction in calories and critical nutrients for kids under 2, there are long term consequences such as stunted growth, cognitive deficits, lower educational attainment, and reduced future productivity.”

Like many other critics of the ethanol subsidy, Pope calls for an end to these subsidies. That would be a significant aid to reigning in the high food prices:

…Mr. Pope says, get rid of the ethanol subsidies and the tariff. “I am in competition with the government and the oil industry,” he says. “It’s not fair.” Smithfield’s economists estimate corn prices would fall by a dollar a bushel if ethanol blending wasn’t subsidized. “Even the announcement that it is going away would see the price of corn go down, which would translate very quickly into reduced meat prices in the meat case,” he says. Imagine what would happen if the mandate and tariff were eliminated, too.

Gary Wolfram, economics and public policy professor at Hillsdale College, offers a similar message. Wolfram points to the sharp increase in food prices, the inefficiency of corn ethanol, and calls for the end of ethanol subsidies:

World food prices are on the rise. In the United States, retail food prices rose .6 percent in February and are up 2.3 percent from February of 2010, the highest 12-month increase since May 2009. Part of the reason for the revolutionary fervor in the Middle East is rising food prices. Yet our government provides a $6 billion per year subsidy to turn the U.S. corn crop into gasoline. Ever gallon of ethanol refined into gasoline receives a 45-cent per gallon subsidy.

[…]

But this inefficient use of corn does more than just cost taxpayers’ money. It is part of the problem of increasing food prices. Ethanol makes up about 8 percent of U.S. fuel for vehicles, but uses up about 40 percent of the nation’s corn crop. The Economist estimates that if all the American corn crop that goes into ethanol were used as food, global corn food supplies would increase by 14 percent.

And as an article in Investors.com argues, ethanol has failed to achieve many of the goals that its proponents claim it would achieve.

Acton’s criticism of the ethanol subsidy is not new. In 2008, Ray Nothstine was interviewed and articulated the moral problems with the ethanol subsidy, the unintended consequences, and inefficiencies of ethanol that are now coming to light. Readers can listen to the interview here.

Rising food and gasoline prices are causing people to bear economic hardships, and, with limited household budgets, these trends cannot continue. Many leaders and economists are correct in calling for a reevaluation of our ethanol policy.



A mere mention of North Korea brings to mind the repressive regime of Dear Leader Kim Jong-il.  Although Kim has been satirized in the West as an impish consumer of cognac and NBA paraphernalia, his grip on society is both chilling and inescapable.  The country frequently receives news coverage for its nuclear aspirations, unjust penal system, and horrendous human rights record.  However, a recent academic study by Stephan Haggard and Marcus Noland uncovers yet another facet of the North Korean case: the power and inevitability of markets in the face of economic despair.

Since the reclusive nature of North Korea precludes any serious study of public opinion and social change, Haggard and Noland pursued the next best sample: North Korean defectors.  In Witness to Transformation: Refugee Insights into North Korea, the authors describe the results and implications of two surveys, conducted between 2004 and 2008, completed by approximately 1,600 refugees living in China and South Korea.  While the study sample is not random, multivariate regression demonstrates that most of the findings are generally applicable to the North Korean population at large.  Simply put, this study gives us a unique look into the collective heart and mind of an otherwise impenetrable nation.

Before delving into the surveys, the authors provide a brief history of the North Korean economy.  Due to rapid mobilization of its labor base, as well as generous support from China and the Soviet Union, North Korea registered strong growth for the first several years of its existence.  But in the late 1980s, as famines set in and the Soviet Union disbanded, the North experienced profound economic pangs.  With famine at its peak in the 1990s, households came to rely on a range of coping strategies—limited consumption, barter, foraging, and purchasing food from emerging markets.  Though marketization was catalyzed by the need for food, it eventually became instrumental vis-à-vis a wide range of consumer goods, as well.  Indeed, the unofficial market became so significant during this time period that in 1994, it equaled 25 percent of the official output.  Military and state functionaries became covert distributors, and the government even decriminalized certain market activities.

Haggard and Noland offer, however, that even when the government seemed to pursue pro-market reform, those measures were accompanied by simultaneous efforts to “reassert state control,” including an administered price structure and higher wage levels for certain groups.  Such bipolar policymaking was unfortunately short-lived, as North Korea has since reversed a number of reforms that had been conducive to market activity.

It is difficult to imagine a situation more disquieting than the North Korea of today, where citizens continue to die of starvation and malnutrition due to dwindling supplies of food and insufficient work.  But just as they did during the 1990s, North Koreans continue to turn to the market in their times of serious need.  Instances abound: nearly half of South Korean respondents reported that all their income came from private business activities, while 69 percent said half or more of their income came from such activities.  More than 70 percent of respondents in that group were involved in trading.  In the China sample, 62 percent reported the market as their primary source of food, while 95 percent of non-farm respondents obtained some amount of food through the market.  Haggard and Noland call this phenomenon ‘marketization from below’—also seen in Eastern Europe—in which market growth is “primarily a function of state failure rather than a proactive reform process.”

It is important to note that, unlike many of us, who come to embrace free enterprise after starting a business or reading Hayek, North Korean engagement of the market is borne of extreme desperation.  After spending years under the yoke of a totalitarian regime that regulates almost every aspect of market and man, courageous Koreans have come to regard the market as a natural elixir to the malady of severe economic deprivation.

Unsurprisingly, involvement in the market often corresponds with other sorts of taboo activities, signifying a deep desire for personal autonomy.  “Taken together,” write the authors, “these results point to a kind of ‘market syndrome’ in which participation in market activities is associated with higher arrest rates, more consumption of foreign news, more negative assessments of the regime, a greater willingness to communicate those views to one’s peers, and a greater propensity to cite political motives for emigration.  On its own terms, the regime is right to fear the market.”

Given the persistence of harsh food shortages, as well as the delicate transfer of power to Kim’s youngest son, Jong-un, North Korea will attract increased attention and interest over the coming years.  Against this backdrop, Witness to Transformation uses refugee testimony to paint a helpful picture of this infamously opaque, but increasingly important country.

Don’t forget about tonight’s Acton on Tap, from 6:30pm-8:00pm in East Grand Rapids. The event will be taking place at the Derby Station (2237 Wealthy St. SE, East Grand Rapids 49506). Tonight’s Acton on Tap will focus on the release of the movie version of Ayn Rand’s Atlas Shrugged:

With the release of Atlas Shrugged-Part 1, Ayn Rand’s libertarian manifesto finally arrives on the big screen. Bruce Edward Walker, in an Acton PowerBlog review of the film, said that he was “thankful Atlas Shrugged-Part I avoids the toxic elements of Rand’s so-called ‘philosophy’ and am hopeful the subsequent installments of the film trilogy steer clear of the same pitfalls. By all means, see the film and avoid the book.” Walker will lead an Acton on Tap discussion on Rand, libertarianism and the “free and virtuous society.” Don’t miss it!

The discussion will be lead by Bruce Edward Walker whose review of the film appeared in the PowerBlog. Join us tonight for what will be a lively and thought provoking discussion.

To read Walker’s review of Atlas Shrugged-Part 1 click here.

For further reading please see Hunter Baker’s article, “Considering Atlas Shrugged on Film” by clicking here.