Posts tagged with: capitalism

In a new article at The Stream, Acton Director of Research Samuel Gregg offers good reasons why a move toward economic nationalism is not in the best interest of America.  He starts with this:

Whatever the motivations for such policies, their costs vastly outweigh their benefits. In the first place, protectionism discourages American businesses and workers from focusing on producing those goods and services where they enjoy a comparative advantage vis-à-vis other nations. Not only does this undermine productivity, efficiency, and international competitiveness of American businesses. It also encourages American workers to enter industries that, no matter how much protection they enjoy, won’t be able to compete in the long term.

Gregg continues to give reasons against economic nationalist policies throughout his article, but one reason that seems to be quite relevant at the time is crony capitalism.  Gregg says this:

Yet another problem with economic nationalism is that it encourages a growing problem in American economic life: crony capitalism.

Giving certain American businesses subsidies or lumbering foreign products with tariffs may seem like economic questions, but in practice they are ultimately political. Such policies encourage companies prefer to seek profits by lobbying legislators and bureaucrats rather than serving customers and creating value.

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EdmundBurkeAdvocates of economic freedom have a peculiar habit of only promoting the merits of the free markets as they relate to innovation, poverty alleviation, and economic transformation. In response, critics are quick to lament a range of “disruptive” side effects, whether on local communities or human well-being.

Alas, in over-elevating the fruits of material welfare, we forget that such freedom is just as important as a restraint against the social dangers of an intrusive state as it is an accelerant to economic progress. If our concern is not just for economic prosperity, but for the wider flourishing of individuals and communities – social, spiritual, and otherwise – economic freedom has a role to play there, too.

As I’ve noted before, Edmund Burke builds the best bridge on this topic, offering a robust vision of liberty that connects these dots accordingly. In a new essay on Burke’s “economics of flourishing,” Yuval Levin highlights those very views, noting that, although his economic solutions were similar to those of his friend and contemporary, Adam Smith, Burke’s conclusions were more closely tied to a deeper commitment to human flourishing.

This begins with Burke’s view of liberty, which rejected any notion of radical individualism or choice as a good unto itself. As Levin explains, Burke “was moved to articulate his vision of human liberty precisely in opposition to a highly individualist, choice-centered understanding of what freedom entails and enables.” Or, as Burke himself puts it, true liberty “is not solitary, unconnected, individual, selfish liberty, as if every man was to regulate the whole of his conduct by his own will” but “social freedom” – “another name for justice; ascertained by wise laws, and secured by well-constructed institutions.” (more…)

initiativeThe term “free market” doesn’t really capture the essence of the economic system that produces prosperity, says Michael Novak. The secret that “liberated more than a half billion of their citizens from poverty” was not mere freedom but private ownership and personal initiative.

The new economy in which we live is often called “the free market economy.” But markets are universal. Markets were central during the long agrarian centuries, through biblical times, in all times. For this reason, the term “the market economy” or even “the free-market economy” somewhat misses the mark.

More accurate is the “initiative-centered,” the “invention-centered,” or in general the “mind-centered economy.” More than anything, mind is the cause of wealth today. The Latin word caput (head) — the linguistic root of “capitalism” — has inadvertently caught the new reality quite well.

“The free economy” captures only part of the secret — it emphasizes the conditions under which the mind is more easily creative, in the fresh air of freedom. Freedom is a necessary condition, but the dynamic driving cause of new wealth is the initiative, enterprise, creativity, invention — which use the freedom.

Freedom alone is not enough. Freedom alone can also produce indolence and indulgence. To awaken slothful human beings out of the habitual slumber and slowness of the species, the fuel of interest must normally be ignited. One must move the will to action by showing it a route to a better world. Since humans are fallen creatures, mixed creatures, not angels, the fuel of interest is a practical necessity. The fire of invention lies hidden in every human mind, the very image of the Creator infusing the creature. To ignite it, one must offer incentives, a vision of a higher, better human condition, not only this-worldly, but also nourishing the expansion of the human soul and easement of bodily infirmities.

There is a natural desire in every human being, although it is often slumbering, to better his or her condition. And it is good for a woman to liberate herself and her whole people from the narrower horizons within which they find themselves. It is good for humans to catch glimmers of new possibilities for human development.

This, or something very like this, is the famous, celebrated and usually misunderstood “spirit of capitalism.” This is not a spirit of greed or avarice, which are grasping and small, not creative. It is an esprit, a gift of the spirit rather than of the body.

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Wall-E1Humans have a tendency to daydream about a day or a place where work is no more, whether it be a retirement home on a golf course or a utopian society filled with leisure and merriment.

But is a world without work all that desirable?

In a recent lecture at Southeastern Baptist Theological Seminary, the question is explored by Dr. Hunter Baker, winner of the Acton Institute’s 2011 Novak Award and author, most recently, of The System Has a Soul: Essays on Christianity, Liberty, and Political Life.

Countering the cultural priorities and pressures of the day, Baker outlines a robust Christian vision of work and the economy, drawing on thinkers such as Wilhelm Röpke and Lester DeKoster, as well as science fiction fixtures such as WALL-E, 1984, and Beggars in Spain.

“Work is a gift from God, not a curse,” says Baker. “…The science fiction dreams of human beings released from all labor should probably better be seen as nightmares…We are made to continually be in fellowship with one another, working, creating value, giving, receiving. This is who God has made us to be.” (more…)

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“Capitalism isn’t working” by Cary Bass-Deschenes (CC BY 2.0)

What is the role that Christians play in business and the marketplace?

A recent episode of Equipped with Chris Brooks, titled “Is Capitalism bad business?” wrestles with that question and more. During his introduction, Brooks explains why he was pondering the question and there are a couple of reasons. The majority of “Equipped” listeners are not clergy, but men and women who work in the marketplace. Because of that, Brooks wants to talk about the “good that business does” and the role of Christians in the marketplace. Sometimes we limit ourselves to evangelization, whereas Brooks argues that doing good business is a good in and of itself. He was also concerned with the recent revival of socialism in American politics and conversation. More and more younger men and women are disillusioned with the free market, with more than half of millennials declaring they do not support capitalism. (more…)

Frank Borman, then-chairman of the Eastern Airlines, said that “capitalism without bankruptcy is like Christianity without Hell.”

That’s one way to take Peter Heslam’s reflection on the closing of BHS in the UK, “Business with a Human Face.”

I would add that the purportedly impersonal nature of market exchange is also what attracts many of its supporters. Drones and automated checkout lines are increasingly allowing us not to see any faces at all.

And as Martin Luther would surely have also added, when we see the face of our neighbor, we are doing so before the face of God (coram Deo), and in our service to one another we are to be his agents, or “masks” (larvae Dei).

Photo courtesy of the Friedman Foundation for Educational Choice

Photo courtesy of the Friedman Foundation for Educational Choice

As we approach what would be Milton Friedman’s 104th birthday this Sunday, July 31st, we should note the enduring significance of his evaluation of the connection between economic and political freedom. In his popular work, Capitalism and Freedom, in a chapter titled “The Relation between Economic Freedom and Political Freedom,” Friedman explains how a society cannot have the latter without the former.

Friedman criticizes the notion that politics and economics can be regarded separately and that any combination of political and economic system is possible. He calls the view “a delusion,” holding that there is “an intimate connection between economics and politics.” Though Friedman concedes the possibility of an economically free and politically repressed society, the opposite, he claims, is impossible. Political freedom, both historically and logically, is inseparable from economic freedom.

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