Acton’s busy week of media appearances continued last night with Acton President Rev. Robert A. Sirico joining guest host Arthur C. Brooks – president of the American Enterprise Institute – on The Hugh Hewitt Show to discuss Pope Francis, Evangelii Gaudium, and the compatibility of Catholic social teaching with free market capitalism. We’ve embedded the interview for you below, and added the video of Arthur Brooks’ 2012 Acton University plenary address after the jump.
In “Human Nature and Capitalism” on AEI’s The American, Arthur C. Brooks and Peter Wehner look at three different “pictures” of what it means to be human and point to the one, foundational understanding that has undergirded the flourishing American culture of democratic capitalism:
“If men were angels,” wrote James Madison, the father of the Constitution, in Federalist Paper No. 51, “no government would be necessary.” But Madison and the other founders knew men were not angels and would never become angels. They believed instead that human nature was mixed, a combination of virtue and vice, nobility and corruption. People were swayed by both reason and passion, capable of self-government but not to be trusted with absolute power. The founders’ assumption was that within every human heart, let alone among different individuals, are competing and sometimes contradictory moral impulses and currents.
This last view of human nature is consistent with and reflective of Christian teaching. The Scriptures teach that we are both made in the image of God and fallen creatures; in the words of Saint Paul, we can be “instruments of wickedness” as well as “instruments of righteousness.” Human beings are capable of acts of squalor and acts of nobility; we can pursue vice and we can pursue virtue.
And they draw a parallel to institutions of government where democracy, with all of its flaws, also works itself out to be the most fitting form of government under this model of human nature. When I engage with critics of the market economy, I use the following Churchill quote but substitute “market economy” for “democracy.” Valid, I think, because we have some disastrous experience with political systems that do not operate in concert with a more or less open market.
Many forms of Government have been tried and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time. — Winston Churchill (House of Commons, Nov. 11, 1947)
Brooks and Wehner:
… our “picture of human nature” determines, in large measure, the institutions we design. For example, the architects of our government carefully studied history and every conceivable political arrangement that had been devised up to their time. In the course of their analysis, they made fundamental judgments about human nature and designed a constitutional form of government with it in mind.
What is true for creating political institutions is also true for economic ones. They, too, proceed from understanding human behavior.
It is hard to overstate the importance of this matter. The model of human nature one embraces will guide and shape everything else, from the economic system one embraces (free-market capitalism versus socialism) to the political system one supports (democracy versus the “dictatorship of the proletariat”). Like a ship about to begin a long voyage, a navigational mistake at the outset can lead a crew to go badly astray, shipwreck, and run aground. To use another metaphor, this time from the world of medicine: A physician cannot treat an illness before diagnosing it correctly; diagnosing incorrectly can make things far worse than they might otherwise be.
Those who champion capitalism embrace a truth we see played out in almost every life on almost any given day: If you link reward to effort, you will get more effort. If you create incentives for a particular kind of behavior, you will see more of that behavior.
A free market can also better our moral condition—not dramatically and not always, but often enough. It places a premium on thrift, savings, and investment. And capitalism, when functioning properly, penalizes certain kinds of behavior—bribery, corruption, and lawlessness among them—because citizens in a free-market society have a huge stake in discouraging such behavior, which is a poison-tipped dagger aimed straight at the heart of prosperity.
Read the full article on The American.
On his website, David Bahnsen reviews The Battle: How the Fight between Free Enterprise and Big Government Will Shape America’s Future by Arthur C. Brooks:
The strongest points of the book, and the reason Brooks has done such critically important work here (World magazine has already recognized the book as its Book of 2010, by the way) are found in these two areas:
(1) The moral nature of the battle that exists
(2) The fundamental materialism that underpins the left’s approach towards creating income equality.
I heard Dr. Brooks speak about the latter at the annual Acton Institute dinner in 2009 and wrote about it here. Brooks concept of “earned success” is indisputably true and of fundamental importance in how we approach the problems in today’s world. Understanding the idea that true happiness comes from “earned success”, and not simply receiving a bigger slice of society’s overall wealth pie via government-coerced redistribution, is not mere economics. This latter point makes his former point all the more compelling. For what could be more immoral than advocating a policy worldview that dooms millions of people to unhappiness by robbing them of their human dignity? The arguments against the coercive and progressive and inefficient portions of our tax code are important (and all valid), but they miss the most important point of all: They fail to do what they set out to do, and make life worse for those they set out to help.
Read “The Battle for our Hearts and Souls” by David Bahnsen.
A very good piece on taxation, income inequality and fairness in today’s Wall Street Journal by Arthur C. Brooks, president of the American Enterprise Institute. Brooks, a frequent guest speaker at Acton events, is also author of “The Battle: How the Fight Between Free Enterprise and Big Government Will Shape America’s Future”, forthcoming from Basic Books in June. Watch for the review on the PowerBlog soon.
Simple facts about our tax system do not support the contention that it is “unfair” in favor of the rich. According to the most recent IRS data, the top 5% of earners bring in 37% of the income but pay 60% of the federal individual income taxes. The bottom half of earners bring home 12% of the income but pay 3% of the taxes. Today, according to the Tax Foundation, 60% of Americans consume more in government services than they pay in taxes.
In sum: A large majority disagrees with the current administration’s redistributionist philosophy; believes the rich already face a tax rate that is too high; and disapproves of the fact that more and more Americans pay nothing in federal income taxes. So why do arguments like the president’s persist?
The answer is that nobody wants to sound anti-poor, so we too easily concede the notion of fairness to those who define it as redistribution and criticize redistribution only because it leads to economic inefficiency.
This is an error. There is nothing inherently fair about equalizing incomes. If the government penalizes you for working harder than somebody else, that is unfair. If you save your money but retire with the same pension as a free-spending neighbor, that is also unfair.
Read “‘Spreading the Wealth’ Isn’t Fair” on the Wall Street Journal Web site.
In “The Real Culture War Is Over Capitalism,” Arthur C. Brooks argues in the Wall Street Journal that the “major cultural schism” in America today divides those who support capitalism and, on the other side, those who favor socialism. He makes a strong case for the moral foundations of free enterprise and entrepreneurship and points to the recent “tea parties” as evidence that Americans still favor the market economy. Brooks, the president of the American Enterprise Institute, says Americans are revolting against “absurdities” like the bailout of General Motors that will be financed with ballooning budget deficits and trillions in new federal debt. He writes:
… the tea parties are not based on the cold wonkery of budget data. They are based on an “ethical populism.” The protesters are homeowners who didn’t walk away from their mortgages, small business owners who don’t want corporate welfare and bankers who kept their heads during the frenzy and don’t need bailouts. They were the people who were doing the important things right — and who are now watching elected politicians reward those who did the important things wrong.
Voices in the media, academia, and the government will dismiss this ethical populism as a fringe movement — maybe even dangerous extremism. In truth, free markets, limited government, and entrepreneurship are still a majoritarian taste. In March 2009, the Pew Research Center asked people if we are better off “in a free market economy even though there may be severe ups and downs from time to time.” Fully 70% agreed, versus 20% who disagreed.
He also points out that the government has been increasingly “exempting” Americans from paying taxes, an intentional strategy to create a larger class of government-dependent citizens.
My colleague Adam Lerrick showed in [the Wall Street Journal] last year that the percentage of American adults who have no federal income-tax liability will rise to 49% from 40% under Mr. Obama’s tax plan. Another 11% will pay less than 5% of their income in federal income taxes and less than $1,000 in total.
To put a modern twist on the old axiom, a man who is not a socialist at 20 has no heart; a man who is still a socialist at 40 either has no head, or pays no taxes. Social Democrats are working to create a society where the majority are net recipients of the “sharing economy.” They are fighting a culture war of attrition with economic tools. Defenders of capitalism risk getting caught flat-footed with increasingly antiquated arguments that free enterprise is a Main Street pocketbook issue. Progressives are working relentlessly to see that it is not.
Read the “The Culture of Charity,” the Spring 2007 interview with Brooks in Acton’s Religion & Liberty. Watch a 16-minute video interview with Brooks recorded at the Acton Grand Rapids office in May 2008
Nicholas Kristof’s Dec. 21 New York Times column was, he says, “a transparent attempt this holiday season to shame liberals into being more charitable.” He quotes Arthur Brooks’ “Who Really Cares” book which shows that conservatives give more to charity than liberals.
The upshot is that Democrats, who speak passionately about the hungry and homeless, personally fork over less money to charity than Republicans — the ones who try to cut health insurance for children.
“When I started doing research on charity,” Mr. Brooks wrote, “I expected to find that political liberals — who, I believed, genuinely cared more about others than conservatives did — would turn out to be the most privately charitable people. So when my early findings led me to the opposite conclusion, I assumed I had made some sort of technical error. I re-ran analyses. I got new data. Nothing worked. In the end, I had no option but to change my views.”
Kristof echoes Rev. Robert Sirico’s Dec. 17 Acton commentary “Why We Give” (published on Dec. 23 in the Detroit News) which also looks at Brooks’ work on giving and the deeper theological dimensions of charity.
… the tradition of gift-giving is rooted in the gift that God offers to the world in his Son who comes in the appearance of a frail babe. Likewise, the Magi, the Wise Men, who came from the East, brought the Christ-child exotic gifts to celebrate his Advent.
There is another, perhaps more practical aspect of the giving of gifts that is worth pondering which was brought to the fore by Arthur Brooks, author of the 2006 book “Who Really Cares: America’s Charity Divide – Who Gives, Who Doesn’t and Why it Matters.” Brooks investigated the American habit of giving and what he found surprised some, irritated others and confirmed some suspicions that I have had for some time. Among his findings was that the general profile of the gift-giver is one who has a strong family life and who attends church regularly.
As a quick follow-up to Ray’s post yesterday, be sure to check out the work of Arthur C. Brooks on charitable giving. The spring issue of Religion & Liberty featured an interview with him, and his book, Who Really Cares?, was the basis for a special focus on ABC’s 20/20 (hosted by John Stossel):
John Stossel: “But it turns out that this idea that liberals give more is a myth. These are the twenty-five states where people give an above average percent of their income, twenty-four were red states in the last presidential election.”
Arthur Brooks, Who Really Cares, author: “When you look at the data, it turns out the conservatives give about thirty percent more per conservative-headed family than per liberal-headed family. And incidentally, conservative-headed families make slightly less money.”
Connecting the links between so-called “red” states, conservatism, religiosity, and the south are interesting and instructive exercises.