Posts tagged with: business

Sic semper tyrannis, eh?

Sic semper tyrannis, eh?

The Burger King acquisition of Tim Hortons and the resulting plans to move the corporate headquarters under the taxing authority of the Canadian government is being derided by some as unpatriotic.

This is the latest in a long string of similar phenomena over the last decade or so, as we see patriotic loyalty (or the lack thereof) becoming a political issue in the context of offshoring, globalization, outsourcing, and so on.

A response to the charge of being unpatriotic would seem to me to require at least two points.

First, the responsibilities of a business owner, CEO, or corporate board are different than those of a government politician. They have different loyalties, so to speak. So to judge the one by the standards of the other is an exercise in missing the point.

Second, I would respond with a query along these lines: Which is more unpatriotic, a greater disservice to a nation, for someone to be involved in: moving a business from one country to another or making the tax environment in a country inhospitable to businesses?

Hobby-Lobby-StoreWhen the Supreme Court ruled on the Hobby Lobby case, the near universal reaction by liberals was that it was a travesty of epic proportion. But as self-professed liberal law professor Brett McDonnell argues, the left should embrace the Hobby Lobby decision since it supports liberal values:

The first question was: Can for-profit corporations invoke religious liberty rights under RFRA? The court answered yes. HBO’s John Oliver nicely expressed the automatic liberal riposte, parodying the idea that corporations are people. It is very funny stuff.

It is not, however, especially thoughtful stuff. The court does not argue that corporations are just like real people. Rather, it argues that people often exercise faith collectively, in organizations. Allowing those organizations to assert religious-liberty rights protects the liberty of the persons acting within them. The obvious example is churches, usually legally organized as nonprofit corporations.

The real issue is not whether corporations of any type can ever claim protection under RFRA — sometimes they can. The issue is whether for-profit corporations can ever have enough of a religious purpose to claim that protection.

To me, as a professor of corporate law, liberal denial of this point sounds very odd. In my world, activists and liberal professors (like me) are constantly asserting that corporations can and should care about more than just shareholder profit. We sing the praises of corporate social responsibility.

Well, Hobby Lobby is a socially responsible corporation, judged by the deep religious beliefs of its owners. The court decisively rejects the notion that the sole purpose of a for-profit corporation is to make money for its shareholders. This fits perfectly with the expansive view of corporate purpose that liberal proponents of social responsibility usually advocate — except, apparently, when talking about this case.

McDonnell is right, of course. Support for religious liberty should transcend partisan political lines. And it used to be an issue that was championed by liberals. The fact that religious liberty is now despised and denigrated reveals a sudden, perhaps irrevocable shift in the nature of progressivism in America.

(Via: Rod Dreher)

As leaders of HOPE International, an organization that empowers men and women across the globe through business training, savings services, and small loans, Peter Greer and Chris Horst have witnessed the transformative impact entrepreneurship can have on individuals and communities, particularly when paired with the power of the Gospel.

In Entrepreneurship for Human Flourishing, a new book for AEI’s Values and Capitalism project, they explore this reality at length, offering compelling stories of businesspeople that illustrate the profound importance of free enterprise and entrepreneurship in equipping the poor and empowering the marginalized.

Watch the trailer for the book here:

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comparativeadvantageNote: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.

The Term: Comparative advantage

What it Means: The ability of an individual or group of individual (e.g., a business firm) to produce goods or services at a lower opportunity cost than other individuals or groups.

Why it Matters: There is a story of the distinguished British biologist, J.B.S. Haldane, who found himself in the company of a group of theologians. On being asked what one could conclude as to the nature of the Creator from a study of his creation, Haldane is said to have answered, “An inordinate fondness for beetles.”

When we examine creation to uncover what it reveals about the character of God, one of the things we discover time and time again is the Creator’s fondness for diversity. Like Haldane, we can see this by looking at biology (e.g., there are more species of beetle than birds or mammals combined). But we can also find it when we turn to economics.

A primary example of God’s enthusiasm for diversity is the concept of comparative advantage. While the definition of the them makes it sounds dull and wonky, comparative advantage is a beautiful, theologically profound norm of creation.

Fully appreciating the nuances of the ideas requires timely reflection. But understanding it can be achieved when a few minutes. In this brief video, economist Donald J. Boudreaux does a masterful job of explaining how, when combined with trade, comparative advantage improves human communities.
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t873In a 5-4 decision, the Supreme Court just announced its ruling in favor of Hobby Lobby, holding that, “as applied to closely held corporations, the government’s HHS regulations imposing the contraceptive mandate violate the Religious Freedom Restoration Act of 1993 (RFRA).” The full opinion, written by Justice Samuel Alito, can be read here.

Although there is still much to digest, and although the majority opinion still leaves quite a bit of room for related battles to continue, it’s worth noting that that whatever perceived “narrowness” we see in the decision — confining things specifically to closely held corporations — remains a significant victory, particularly given our culture’s prevailing attitudes about business.

According to HHS, by simply incorporating one’s business in the pursuit of profit — “without in any way changing the size or nature of their businesses” — a company “would forfeit all RFRA (and free-exercise) rights” (quotes from Alito’s paraphrase). The arguments supporting such a view vary, including the principal argument advanced by HHS that corporations cannot “exercise religion.”

Alito dissects this from a variety of angles, and does so rather compellingly. But one of the more noteworthy sections is his refutation of the notion that for-profit corporations aren’t protected by RFRA because they “simply seek to make a profit.” (more…)

Did ‘Social Business’ Sink the Cardboard Bike?

Did ‘Social Business’ Sink the Cardboard Bike?

Jonathan Witt, research fellow at Acton, recently wrote a piece at The Federalist about “social business.” He argues that it might do more good to own and operate an ethical business that follows through on its contracts and “respects the dignity of employees and customers,” rather than trying to have a “social business.” Witt begins by talking about a cardboard bike. In 2012, Izhar Gafni became relatively famous by creating a sturdy cardboard bike that could be sold to the poorest around the world for $20. After two years and unsuccessful Indiegogo campaign, this potentially revolutionary project has failed to go anywhere. Witt argues that “social business” is to blame:

After talking up the virtues of a “social business model,” the start-up behind the bike, Cardboard Technologies, expended considerable energy trying to raising capital from Indiegogo donors uninterested in profit. The lack of a profit motive may have played a role. It also didn’t help that the price of the bike kept shifting—from $20 to $290 to $95 plus $40 shipping. Would-be investors had to wonder: Was the bike going to have a revolutionary everyman price, or wasn’t it?

CEO Nimrod Elmish tried to explain, saying the bicycle’s price will fluctuate depending on where you live, costing more for buyers in wealthy countries and nothing for those in developing countries. “We want to bring a social business model that will make [it] available to all,” Fortune quoted him as saying. “We don’t have a price tag, we have a value tag.”

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pope and cross

Pope Francis

Much has been said about Pope Francis’ views on economics (in fact, you can read Acton’s Special Feature on this here.) In The Wall Street Journal, Cardinal Timothy Dolan of New York, discusses how the media has skewed Francis’ remarks as endorsing redistribution and denouncing capitalism. Cardinal Dolan says this is unfortunate, given what the pope has actually said. While the pope is clear that we must be generous in all our social activity, he is not denouncing capitalism.

The church believes that prosperity and earthly blessings can be a good thing, gifts from God for our well-being and the common good. It is part of human nature to work and produce, and everyone has the natural right to economic initiative and to enjoy the fruits of their labors. But abundance is for the benefit of all people.

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Regulatory Climate IndexThe revitalization of cities has become a significant focus among today’s Christians, with many flocking to urban centers filled with lofty goals and aspirations for change and transformation.

Last summer, James K.A. Smith expressed concern that such efforts may be overly romanticizing certain features (community!) to the detriment of others (government), concluding that “farmer’s market’s won’t rescue the city” but “good government will.” Chris Horst and I followed up to this with yet another qualifier, arguing that while both gardens and good governance are indeed important, so is business and entrepreneurship.

Families, churches, institutions, businesses, and governments all need to be in right relationship if cities are to flourish, and this means that Christians need to gain a clear understanding of what these relationships look like. How do the economies of love, creative service, wisdom, wonder, and order interact and intersect, and how do we orient our actions and attitudes accordingly?

For example, if a city’s economic future is driven, among other things, by entrepreneurialismhigh levels of human capitalclustering of skilled workers and industries, or in the case of North Dakota’s Bakken region, bountiful natural resources, what role should the People of God play therein? What role do families play in those endeavors? What about churches, community associations, organizations, or businesses? How ought public policy to guide (or not guide) various efforts? Christians are called to be concerned with all of the above.

In a new study by the U.S. Chamber of Commerce Foundation — Regulatory Climate Index 2014: The Cost of Doing Business in America — we see a great example of the types of questions we ought to be asking. Focusing on 10 cities across America, the study investigates “the efficiency of local regulations that apply to small businesses,” demonstrating the full impact that the dirtier, more “boring” and mundane elements can have on whether and how individuals are empowered to invest, serve, and sacrifice within and for their cities. (The project was led by Michael Hendrix, who has contributed here on the blog in the past.) (more…)

800px-Hartmann_Maschinenhalle_1868_(01)In a marvelous speech on the origins of economic freedom (and its subsequent fruits), Deirdre McCloskey aptly crystallizes the deeper implications of her work on bourgeois virtues and bourgeois dignity.

For example, though many doubted that those in once-socialistic India would come to see markets favorably, eventually those attitudes changed, and with it came prosperity. As McCloskey explains:

The leading Bollywood films changed their heroes from the 1950s to the 1980s from bureaucrats to businesspeople, and their villains from factory owners to policemen, in parallel with a similar shift in the ratio of praise for market-tested improvement and supply in the editorial pages of The Times of India… Did the change from hatred to admiration of market-tested improvement and supply make possible the Singh Reforms after 1991? Without some change in ideology Singh would not in a democracy have been able to liberalize the Indian economy…

…After 1991 and Singh much of the culture didn’t change, and probably won’t change much in future. Economic growth does not need to make people European. Unlike the British, Indians in 2030 will probably still give offerings to Lakshmi and the  son of Gauri, as they did in 1947 and 1991. Unlike the Germans, they will still play cricket, rather well. So it’s not deep “culture.” It’s sociology, rhetoric, ethics, how people talk about each other. (more…)

mcdonalds“Clean up your own mess. Your mother doesn’t work here.”

That was a sign, printed on dot matrix printer paper, which hung in the breakroom of the McDonald’s where I worked. While that was nearly thirty years ago, I suspect that same sign is still there (though probably reprinted on a laser printer). But the idea behind it has changed. Your mother may not work at McDonalds, but the company—and others that hire low-skilled employees—are increasingly taking on the role of in loco parentis.

Lessons in basic life skills that were once taught by parents—such as punctuality, self-direction, basic personal hygiene—are increasingly being provided by the shift manager at the local fast food restaurant. That is why it’s absurd to claim that companies that are willing to hire people who are unqualified for the labor force are somehow getting over on the American taxpayer.

As Reihan Salam,
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