In a recent piece for the Wall Street Journal, Emory economics professor Paul H. Rubin makes an interesting argument about the way economists tend to over-elevate and/or misconstrue the role of competition in the flourishing of markets.
“Competition plays a supporting role,” he argues, but “cooperation makes markets thrive”:
The way we use the term competition instead of cooperation fosters anti-market bias. “Competition” carries a negative connotation because it implies winners and losers, and our minds naturally feel sympathy for the losers. But cooperation evokes a positive response: It’s a win-win situation with no losers. And in fact the word competition doesn’t depict market activity as aptly as the word cooperation. The “competitive economy” would be better described as the “cooperative economy.”
Consider the most basic economic unit, the transaction. A transaction is cooperative because both parties gain from a voluntary exchange. There is competition in markets, but it’s actually competition for the right to cooperate. Firms must compete for the privilege of selling to consumers—for the right to cooperate with consumers. Workers compete for the right to cooperate with employers. Competition matters because it ensures that the most efficient players will gain the right to cooperate on the best terms available. But competition plays a supporting role, while cooperation makes markets thrive. (more…)
In my Christmas commentary this week, “Gratification and Civilization,” I examine the connection between making your kids wait until Christmas morning to open their presents and the development of civilization.
A key factor of driving forward the development of civilization, then, is the family unit. For Cochran rightly warns that civilization “depends on masculine ambition.” The ambition to grow a business for someone “could mean feeding himself & his workers, along with any family they might have. His ambition could be a huge boon to society. Take that away, and you have a bunch of men doing what they need to do to stay comfortable, but nothing more—nothing for any women or any increasingly hypothetical children.”
The Dutch Reformed theologian Herman Bavinck explores the link between family and civilization in his study of The Christian Family. Bavinck describes the triad of father-mother-child:
The two-in-oneness of husband and wife expands with a child into a three-in-oneness. Father, mother, and child are one soul and one flesh, expanding and unfolding the one image of God, united within threefold diversity and diverse within harmonic unity.
These relationships are of civilizational significance:
This three-in-oneness of relationships and functions, of qualities and gifts, constitutes the foundation of all of civilized society. The authority of the father, the love of the mother, and the obedience of the child form in their unity the threefold cord that binds together and sustains all relationships within human society. Within the psychological life of every integrated personality this triple cord forms the motif and melody. No man is complete without some feminine qualities, no woman is complete without some masculine qualities, and to both man and woman, the child is held up as an example (Matt. 18:3). These three characteristics and gifts are always needed in every society and in every civilization, in the church and in the state. Authority, love, and obedience are the pillars of all human society.
One can hardly discuss the family during this season of the year without also reflecting on the holy family, Jesus, Mary, and Joseph. Bavinck describes them as “the divine counterpart” to Adam, Eve, and their children. “The holy family is the example of the Christian home,” writes Bavinck.
And on this Christmas let us remember and be thankful for the greatest gift of all, the birth of Jesus Christ!
The 2008 credit crisis is not only a crisis in economics, but also a crisis in the basic concepts and assumptions that underlie our thinking about economics, economics as a science. Critical analyses are called for of both economic practices and economic theory. New concepts and paradigms are needed. The first Kuyper Seminar Amsterdam aims at exploring what resources the Christian tradition has to offer for developing a sustainable and just economy of the future.
He focused on three basic questions: What is political and economic freedom? How do we use Scripture in our approach to social life? What about natural law?
On the first: A Christian anthropology is anti-revolutionary in the sense of van Prinsterer and Kuyper. In this sense Groen was a protestant Lord Acton. The spirit of human autonomy manifest in the French Revolution is at odds with the spirit of Christ manifest in all areas of life.
On the second: The missing theological piece of the puzzle is that the Bible is only part of the revelation of that we need to get to concrete positions on various social questions. The distinction between special vs. general revelation is critical here, as is the place of natural law in relation to general revelation.
On the third: If we can figure out what to do with natural law, we will have taken a critical first step in articulating a vigorous public theology. The natural law tradition acknowledges both special and general revelation. Natural law is a forgotten legacy of the Reformation, and it’s one that we have to recover to connect faith and economics today.
I hope to update this post with more as the day progresses.
His lecture focuses on explicating the following question:
What is a humane economy, and how does this relate to enterprise and entrepreneurship?
First, he explores a theory of humane economics, rooted in a robust moral anthropology. Economics is a theory of human action, production, distribution, consumption. Economic action is fundamentally moral in nature, preferring some goods to others, some ends to others. Insufficiency is a natural, basic fact of human existence: every human being needs other human beings. Perhaps the chief tenet of the natural law is human insufficiency (assuming relations to neighbors and God). A humane economics is one that enshrines natural limits to economic activity, accepting the natural hierarchy of human goods, guarding against the commodification of everything.
Second, a culture of enterprise is to be understood as one promotes entrepreneurship.Empathy as an essential part of anthropology, is an essential part of enterprise at the heart of an economic system. Moral ecology (Novak) and culture address the climate of a person’s socialization, a person’s relation to others. Human beings are born needy and wanting. This reality of insufficiency must be recognized. Self-awareness calls human beings to recall their lowly state and contextualizes their expectations. The moral consequence is that there must be an empathetic orientation toward the other, focusing on the needs, the lack, of other people. Enterprise, the focus on innovative responses to human needs and wants, is therefore a moral consequence of empathy.
Finally, the role of entrepreneurs in an entreprise culture must be explored. in a humane economic system. To support human flourishing a culture of enterprise must have a holistic account of human insufficiency, the principle that human beings have unattainable non-economic needs, as well as attainable economic needs. Entrepreneurs have a critical social role in addressing the latter: attainable economic needs. Since these needs are so variable, actual embodiments of entrepreneurship are equally variable. There are many different kinds of entrepreneurs, focused on many different kinds of goods. Creativity, however, seems to be one of the characteristic features of entrepreneurship. Only when entrepreneurs become wisdom-lovers, and wisdom-lovers become entrepreneurs, can we hope to move to a culture of enterprise that promotes a humane economics.
Leading up to next week’s Labor Day holiday we’ve been reflecting on the nature of work the last few days. Today I’d like to conclude this little series with a note on the relationship between work and civilization, with specific reference to work in the context of Western civilization.
But as DeKoster and Berghoef also note, “God so arranges that civilization grows out of the same effort that develops the soul.” What they mean is that God has providentially arranged that the work of each individual in a society, when properly oriented toward the service of others, to create a civilization, in which the needs of others are met by the work of their neighbors, whether proximate or at a greater remove.
In his little book Work: The Meaning of Your Life—A Christian Perspective, DeKoster puts these pieces together. The two definitions fit well. Work is “the form in which we make ourselves useful to others.” And civilization is “sharing in the work of others” and “good and services to hand when we need them.”
As he writes, “It is a circle we will finally see close: our working puts us in the service of others; and the civilization which work creates puts us in the service of ourselves. Thus work restores the broken family of mankind.”
And for the broad account of the relationship between the Christian faith, including the theological perspective on work, and the development of Western civilization, see the Acton Media production The Birth of Freedom. You can view the trailer below:
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.
Popes in Rome have attempted to steer the Catholic flock away from the “seductive” forces of socialist ideologies threatening human liberty, which since the late 1800s have relentlessly plucked away at ”the delicate fruit of mature civilizations” as Lord Acton once said.
From Pius IX to Benedict XVI, socialism has been viewed with great caution and even as major threat to the demise of all God-loving free civilizations, despite many of their past and present socio-political and economic “sins.”
In their various official publications and social encyclicals, at least since the advent of the latter with Leo XIII’s Rerum Novarum (1891), Roman pontiffs have given socialism a bad rap: It has never been positively perceived as a good political order, east or west of the Tiber River.
Why so? We do not have to look further than the popes’ own teachings regarding their vision of human work, anthropology, happiness and basic dignity.
First of all, socialism ultimately allows political authority to direct the ends of human happiness; that is to say, its supports the secular state’s programs and its functionaries’ potential and power to resolve much of man’s social and economic needs. It, therefore, replaces and distrusts individuals, local communities and families acting in free alliance with their Creator to build a good and better society for all. In a nutshell, socialism treats ordinary citizens like children incapable of governing themselves. When replacing private charity with public welfare programs, socialism takes full advantage of the contemporary crisis of adulthood infecting free societies, whose dishonorable, capricious and selfish citizens are unwilling to make sacrifices gratuitously for their neighbor (see these two Acton videos one character by Lawrence Reed and Michael Miller).
Hence, socialism tends to defile human dignity and dehumanize the personal and local processes of free collaboration and personal responsibility. And as socialism advances closer its pure form in political practice, it ultimately attempts to dictate and bureaucratize all of human socio-economic well being, a concept of social justice built on the dangerous quicksand of modern materialism, which ultimately drags human freedom down to a slow, merciless death.
As the current pope, Benedict XVI, writes:
The State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person − every person − needs: namely, loving personal concern. We do not need a State which regulates and controls everything, but a State which, in accordance with the principle of subsidiarity, generously acknowledges and supports initiatives arising from the different social forces and combines spontaneity with closeness to those in need.… In the end, the claim that just social structures would make works of charity superfluous masks a materialist conception of man: the mistaken notion that man can live ‘by bread alone’ (Mt 4:4; cf. Dt 8:3) − a conviction that demeans man and ultimately disregards all that is specifically human. (Deus Caritas Est, n. 28)
In Mr. Solimeo’s article we read that various popes believe that socialism is part of an “iniquitous plot…to drive people to overthrow the entire order of human affairs” (Pius IX); that “communism, socialism, nihilism (are) hideous deformities of the civil society of men and almost its ruin (and part of) a wicked confederacy” (Leo XIII); socialism is “contradictory (in) nature to the Christian religion (…) No one can be at the same time a good Catholic and a true socialist” (Pius XI); socialism has “no account of any objective other than that of material well-being” (John XXIII); and finally that the “fundamental error of socialism is anthropological in nature…. (It) considers the individual person simply as an element, a molecule within the social organism, so that the good of the individual is completely subordinated to the functioning of the socio-economic mechanism.” (John Paul II)
The first item, “Santa and the ultimate Fairy Tale,” quotes Tony Woodlief to the effect that “fairy tales and Santa Claus do prepare us to embrace the ultimate Fairy Tale.” Schansberg’s (and Woodlief’s) take on this question is pretty compelling and worth considering, even though I’m not quite convinced of the value of the Santa Claus fable.
I’m still a relatively new parent (I have a three and a half year-old) and so I’m still in the midst of sorting out with my wife the best way to handle questions of the reality of Santa Claus. Until very recently, I had always been of the opinion that honesty is the best policy.
I’ve never liked the idea of putting God and Jesus on the same epistemic level (even if only for the first decade or so of a person’s life) as say, the Easter Bunny, the Tooth Fairy, or Santa Claus. Rather than “preparing” the child for “embrace of the ultimate Fairy Tale,” it seems to me that such practice can foster a hermeneutic of suspicion, such that when the child finds out Santa Claus isn’t “real” in any empirical sense, he or she will, at least initially, be inclined to lump God in with other “fairy tales.” That kind of approach seems to lead as much to Freud as it does to Lewis.
I don’t mean to be a killjoy. I’m a lover of literature. I am interested (along with Tolkien) in the question of whether the proper pluralization of dwarf is dwarfs or dwarves (I too prefer the latter). I was an English major in college, and I admit to getting a bit teary-eyed when Zooey Deschanel leads a group of hard-bitten New Yorkers in a rendition of “Santa Claus is Comin’ to Town” at the climax of Elf.
And I agree that we need to cultivate the sense that the realm of empirical science isn’t the only or even the best way of talking about ultimate reality. But again, I’m a bit uncomfortable with the idea that for our children we need to prepare the way for the Gospel with fiction, even well-meant fiction. If my child can’t rely on me to tell the truth about Santa, why should he believe what I have to say about God?
Rather than pointing to how such fairy tales pave the way for belief in the “ultimate Fairy Tale,” I’ve always thought that the youthful belief in Santa underscores the fundamentally fiduciary nature of human beings. We are believing creatures. We basically trust, at least at first, what other people and especially our parents tell us. We aren’t born cynical or un-trusting, but rather dependent and credulous.
This is an important thing to know about humans from a theological and anthropological point of view, but equally important is the recognition of how wrong that credulity can go. We are basically believing creatures, but without the Gospel that belief is corrupted and we create idols for ourselves. Would you say believing in Mardukh, Mammon, and Ba’al “prepare us to embrace the ultimate Fairy Tale”?
All of which leads me to the item I thought of when reading that first post: the famous “Yes, Virginia, there is a Santa Claus” editorial from 1897. As you might guess from my comments above, I have mixed feelings about the editorial, but I thought I’d recommend it since it seems so relevant to Schansberg’s point.
The other post of Schansberg’s that caught my attention was his other Christmas Day offering, in which he contrasts the Lord of the cradle, the cross, and the throne, calling for a comprehensive apprehension of Jesus Christ.
That made me think of this quote from Ed Dobson about Jesus, contained in a story from the Christmas Day Grand Rapids Press (I was out of town so I only got to it over the weekend):
“Everybody loves a baby,” mused Dobson, 58. “But when you start reading the teachings of this baby, and about the sufferings of this baby, you begin to understand better who he is.”
The story goes on in a lot more detail about Dobson’s recent history since retiring from his pastorate at Calvary Church in Grand Rapids. There’s a lot more of interest in that piece.
But his quote speaks quite pointedly to Schansberg’s emphasis on the comprehensive Christ. We need to know of his birth, death, and resurrection.
Oliver “Buzz” Thomas: “We’re like cancer. Unable to pace ourselves, we are greedily consuming our host organism (i.e. planet Earth) and getting dangerously close to killing ourselves in the process. The difference is that cancer has an excuse: No brain.”
Compare to the words of Agent Smith: “…There is another organism on this planet that follows the same pattern. A virus. Human beings are a disease, a cancer of this planet, you are a plague, and we are the cure.”
Know how to sell your wares, Intrinsic quality isn’t enough. Not everyone bites at substance or looks for inner value. People like to follow the crowd; they go someplace because they see other people do so. It takes much skill to explain something’s value. You can use praise, for praise arouses desire. At other times you can give things a good name (but be sure to flee from affectation). Another trick is to offer something only to those in the know, for everyone believes himself an expert, and the person who isn’t will want to be one. Never praise things for being easy or common: you’ll make them seem vulgar and facile. Everybody goes for something unique. Uniqueness appeals both to the taste and to the intellect.
Marketing has come a long way since this advice. In today’s NYT, Kenneth Chang examines how “more and more retailers are also using more rigorous scientific techniques to improve their bottom line.”
In “Enlisting Science’s Lessons to Entice More Shoppers to Spend More,” Chang writes that “OfficeMax is one example,” of a company engaged in this in-depth marketing research. “It has hired Envirosell, a market research company based in New York that takes an anthropological approach to understanding how shoppers navigate stores. Other companies turn to statistical methods used in testing nuclear weapons. New scientific technologies like brain scans also allow companies to peer directly into consumers’ minds.”
That last line is no doubt a bit of hyperbole, but the physicalist/materialist assumptions of many scientists and marketers become rather obvious as you read through the story. Marketing, it seems, has “evolved” in more ways than one since the days of Baltasar Gracián y Morales.