Posts tagged with: capitalism

On the Economix blog at the New York Times, Uwe E. Reinhardt wrote a post titled “How Businesses Create Wealth.” That elicited attention from a commenter who wondered where he was “trying to go with this essay.” Reinhardt, an economics professor at Princeton, answers with “Companies: What Are They Good For?” He also cites an article from Acton’s Journal of Markets & Morality: “A Communitarian Model of Business: A Natural-Law Perspective.” Reinhardt:

Actually, I was not trying to go anywhere with my analysis, other than to point out that businesses create value and wealth beyond the usually narrow slice that accrues strictly to the owners.

In most firms, the largest fraction of the gross value that businesses create with the goods and services they produce is channeled to employees. That allocation helps create household wealth, which may be held in the form of a home or other real estate, pensions or investments in mutual funds, or highly productive human capital — that is, highly educated offspring.

With their chronic suspicion of for-profit business, commentators on the left of the ideological spectrum insufficiently acknowledge that major contribution that business makes to social welfare.

Former Acton colleague, Jay Richards just reported that his book Money, Greed, and God has just been released in paperback. It is a thoughtful Christian analysis of the market economy and an excellent summary of the many key fallacies that plague the way we understand–or rather misunderstand–economics.

He writes:

My tentative title for the book had been The Christian Case for Capitalism. I had even referred to it that way for a couple of years while I was working on it. But the publisher came up with Money, Greed, and God: Why Capitalism Is the Solution and Not the Problem. I have friends who still think my original idea is preferable, but I’m not so sure. I’ve haven’t gotten a sense that anyone has been confused about the title. The only negative effect is that a few wags have suggested that “Money, Greed, and God” sounds like the platform for the Republican Party. I gotta admit, that’s pretty funny.

In any case, the more controversial question has been, why did I choose to defend something called “capitalism”? Wouldn’t it have been better to put “free enterprise” or “free market” in the title? I do have some thoughts about that, which I’ll write about later. But I should say that I was quite intentional in defending something called “capitalism.”

You can also order a copy of the book at the Acton Book Shop. We’ll have paperback copies in stock soon.

In a new column on Sojourners, Prophet Jim Wallis reveals that Wall Street financiers are coming to him for confession, sometimes skulking along darkened streets to hide their shame:

Some come like Nicodemus – a religious leader who came to talk to Jesus in private – at night. Many have felt remorseful about what happened on Wall Street and how it has hurt so many people. They describe the behavior in their profession with words such as “greedy,” “risky,” or “reckless.” These business and banking leaders do feel sorry, but repentance means that remorse must be coupled with a change in the behaviors that led to the problems.

The Prophet, who can read their very thoughts (“repentance and accountability were far from their minds”), bids them to change their ways and reminds them about God and Mammon. But it is not so much a conversion of hearts and minds Wallis is asking for, as it is the divine wrath of Washington regulators. His three-point plan (emphasis mine):

First, provide transparency and accountability. Given the human condition and the many temptations of money, we need transparency and accountability in financial markets and instruments, including high-risk and questionable ones such as the now infamous “derivatives.” To protect the common good, we need to enact greater regulation and oversight of all elements of the banking industry.

Second, provide consumer protection. Any pastor can now tell you stories of how parishioners were mistreated, cheated, and damaged by current banking practices. Many clergy strongly favor protecting consumers from predatory financial practices. They want a strong independent Consumer Finance Protection Agency, with jurisdiction and enforcement power over all companies in the financial sector, in order to protect people from fraudulent, misleading, and abusive practices.

Third, limit size and risk, so banks are no longer too big to fail – and are bailed out at public expense. This means setting limits on the size of financial institutions and the risks they can take. Ban bank ownership of private investment funds, and establish an orderly process to dissolve a failing bank, in order to avoid future taxpayer bailouts. Give a stronger voice to shareholders and investors in institutional practices and policies – including determining the executive compensation of companies, and the now infamous bank executive bonuses.

A much more intelligent and balanced analysis of the financial crisis was published yesterday by Russ Roberts, a professor of economics at George Mason University and a scholar at the Mercatus Center. Note the complete lack of cheap moralizing that informs so much of Wallis’ economic “analysis.” This is from the introduction to Roberts’ “Gambling with Other People’s Money”: (more…)

Blog author: jcouretas
Friday, April 9, 2010
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A reader sends on this fun video. Anyone know where can I get a bottle of this Dr. Utopia’s Ism elixir? Looks tasty. Is one sip enough?

Blog author: jballor
Thursday, March 18, 2010
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In this week’s Acton Commentary I expand on a minor meme floating around the web towards the end of last year that criticized the purported claim made by Lord Brian Griffiths, a Goldman Sachs advisor and vice chairman: “The injunction of Jesus to love others as ourselves is an endorsement of self-interest.”

I do a couple of things in this piece. First, I show that Griffith’s claim was rather different than that reported by various news outlets. Second, I place his reported comments within the broader context, which includes a greater emphasis on generosity than on self-interest. The entire transcript (PDF) of the panel discussion from which the quote was taken is an interesting read.

For instance, Griffiths also says this in the context of the question of ordering self-interest to serve justice: “…nobody, I think, on this panel believes in completely free markets. In fact, I don’t think I know anyone even in Goldman who believes in completely free markets.” By “completely free markets” Griffiths is talking about a pure lassez-faire view of the market. The broader context of Griffiths comments, including his emphasis on generosity and his qualification of endorsement of the market, should serve adequate notice to anyone who seeks to characterize him as a espousing some kind of radical view incompatible with Christian teaching. For more on the theological backgrounds of this topic, see my post over at Mere Comments.

And for even more background on Griffiths views, in addition to his Globalization, Poverty, and International Development, check out his plenary address, which includes endorsement of a kind of cap-and-trade system on carbon markets, given at 2008’s Acton University:

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Via Victor Claar (follow him on Twitter here), an op-ed in The Oracle (Henderson State University’s student paper) by Caleb Taylor, “Tiger Woods and Capitalism.”

A taste: “Contrary to what Michael Moore thinks, capitalism promotes moral and ethical behavior. In Woods’ case, it punishes poor behavior. Sponsors such as Nielsen, AT&T, Gillete and Gatorade have all either suspended or removed their endorsement deals with Tiger due to his moral mistakes.”

In this week’s Acton Commentary, I review a new book by economist Joseph E. Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy. Text follows:

A rare growth industry following the 2008 financial crisis has been financial crisis commentaries. An apparently endless stream of books and articles from assorted pundits and scholars continues to explain what went wrong and how to fix our present problems.

In this context, it was almost inevitable that one Joseph E. Stiglitz would enter the fray of finger-pointing and policy-offerings. As a Nobel Prize economist, former World Bank chief economist, former Chairman of the President’s Council of Economic Advisors, and member of the Pontifical Academy of Social Sciences, it would be surprising if he had nothing to say.

Moreover Stiglitz has assumed the role of social-democrat-public-intellectual-in-chief since his door-slamming departure from the World Bank in 1999. From this standpoint, Stiglitz opines about, well, pretty much everything. He also increasingly labels anyone disagreeing with him as a “market fundamentalist” or “conservative journalist.”

Yet despite his iconoclastic reputation, Stiglitz reveals himself in his latest offering, Freefall: America, Free Markets, and the Sinking of the World Economy, as a rather conventional Keynesian-inclined economist who, like most Keynesian-inclined economists, thinks everything went wrong in the early 1980s. (more…)

actononairOn Monday, Acton Founder and President Rev. Robert A. Sirico took to the airwaves of the BBC and squared off against Oliver Kamm of the London Times in a spirited debate over the merits of Michael Moore’s latest “documentary,” Capitalism: A Love Story. Audio from the BBC3 show Nightwaves is available via the audio player below.

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Topic: Does Capitalism Destroy Culture? A talk by Michael Miller.

When: Thursday, February 18, 2010. 11:45 a.m. Registration; 12:00 p.m. — 1:30 p.m. Lunch & Lecture

Cost: $15 Admission $5 Students (including lunch)

Where: Water’s Building — 161 Ottawa Ave, Grand Rapids, MI 49503

Map it.

Register online today!

It’s not too late to order The Call of the Entrepreneur and The Birth of Freedom for stocking stuffers. An eye-opening report by Patrick Courrielche at Big Hollywood makes for a fine motivator. Some excerpts:

Enter Howard Zinn – an author, professor and American historian – who, with the help of Hollywood and the History Channel, intends to change the way our pre-K through high school children learn American history [beginning with “a new documentary, entitled The People Speak, to be aired December 13th at 8pm on the History Channel.”]. …

Zinn has spent a lifetime teaching college students about the evils of capitalism, the promise of Marxism, and his version of American history – a history that has, in his view, been kept from students. …

Perhaps due to their one-sided perspective of America’s past, Zinn’s history books have largely been limited to colleges and universities, until now. In the press release announcing the broadcast, HISTORY introduced a partnership with VOICES Of A People’s History Of The United States, a nonprofit led by Zinn that bares the same name as his companion book, to help get his special brand of history into classrooms. …

Brian Jones, a New York teacher and actor, is a board member of VOICES and has also played the lead in Zinn’s play Marx in SoHo. … he extols the benefits of this one man play as a tool to introduce people to Marx’s ideas….

Jones is also a regular contributor to Socialist Worker, International Socialist Review, and speaks regularly on the beneficial principles of Marxism, including this year at the 2009 Socialism Conference. He recently gave a speech on the failure of capitalism, proclaiming that “Marx is back.”

Sarah Knopp, a Los Angeles high school teacher, is also on Zinn’s Teacher Advisory Board. Like Jones, Knopp is also a regular contributor to International Socialist Review, Socialist Worker, is an active member in The International Socialist Organization, and was also a speaker at the 2009 Socialist Conference. …

Then there is Jesse Sharkey, a schoolteacher in Chicago. Sharkey is another of Zinn’s Teacher Advisory Board Members and … a contributor to— Socialist Worker.

This is the group that the History Channel is working with “to develop enhanced, co-branded curriculums for a countrywide educational initiative.” …

I am not advocating that we spare our kids the harsh truths of American history, but I am suggesting, given Zinn’s far-left political affiliation, this project is designed to breakdown our vulnerable children’s views of American principles so that they can be built back up in a socialist vision. …

It is not surprising to me that there are groups sympathetic to Marx’s ideas throughout our country. What is surprising is that the most powerful persuasion machine in the world (Hollywood) and the History Channel would provide Zinn such a prominent soapbox to stealthily build a case for a destructive ideology to our children, and as a result mainstream his ideas with the magic of cool music, graphics, and celebrity. Groups that push Marx’s philosophy are like a virtual organism that will not die off even when stung by the undeniable historical evidence showing human behavior makes such a system unsustainable. If we let this virtual organism into our grade schools, it will take decades for our kids to unlearn the ideology.

… When a reporter asked Zinn, “In writing A People’s History, what were you calling for? A quiet revolution?” Zinn responded: “A quiet revolution is a good way of putting it. From the bottom up. Not a revolution in the classical sense of a seizure of power, but rather from people beginning to take power from within the institutions. In the workplace, the workers would take power to control the conditions of their lives. It would be a democratic socialism.”

Counter bad documentaries with good ones. And if you want to do more at this gift-giving time of the year, consider helping the Acton Institute in its ongoing struggle to promote the free and virtuous society.