Posts tagged with: capitalism

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

Kevin Allen, host of The Illumined Heart podcast on Ancient Faith Radio, interviews writer, attorney, and college professor Chris Banescu, an Orthodox Christian, about the economic, moral and spiritual issues surrounding the market economy. Kevin asks: Does the capitalist system serve “the best interests of Christians living the life of the Beatitudes?”

Listen to Chris Banescu on Orthodox Christianity and Capitalism:

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Read “A Primer on Capitalism” on Chris’ personal Web site.

He is also the author of two articles on home schooling (here and here) for Acton Commentary.

In a Forbes blog post titled “Failure of Morality, Not Capitalism,” Rich Kaarlgard counters the critics of supply-side capitalism by pointing to an absence of morality. Kaarlgard declares:

Many people do blame capitalism for bringing us to this low moment in the economy. Do they have a point?

They do if capitalism, as they define it, is devoid of any underlying morality. True enough, it is hard to see any underlying morality when one surveys the present carnage caused by liar loans, shady banks, duplicitous politicians, Ponzi schemers and regulators angling for Wall Street jobs.

Kaarlgard concludes by noting the importance of returning to a free enterprise system with a moral framework, saying, “Every alternative you can imagine is much worse.” He also offers a video version of the post.

Cardinal Cormac Murphy-O’Connor, the Roman Catholic Archbishop of Westminster and President of the Bishops’ Conference of England and Wales, has touched off a row over remarks he made recently concerning the demise of capitalism.

Here’s the context from the Daily Telegraph, a British newspaper:

[the Cardinal] made the astonishing claim at a lavish fund-raising dinner at Claridges which secured pledges of hundreds of thousands of pounds for the catholic church. The Cardinal, dressed in his full clerical regalia, said in a speech at the black tie dinner that he had worried whether the dinner should go ahead because of the troubled economic times. But he went on to say that in 1989, with the collapse of the Berlin wall, that “communism had died.” In 2008, he said, “capitalism had died.”

The response from the business community was swift.

Catholic business people surveyed by The Daily Telegraph insisted that there were plenty of good capitalists, who used the process of making money to benefit all of society. The problems came when capitalism was used by a few to enrich themselves to the detriment of everyone else. Sir Tom Farmer, the Scottish billionaire former owner of car parts firm Kwik-Fit, said: “I seriously hope that capitalism is not dead, but I hope that the abuse of capitalism is dead. I hope that is what the Cardinal meant. At the end of the day it is a system that creates wealth – but it has its failings.”

Rev. Robert A. Sirico, president of the Acton Institute, was interviewed on Ave Maria Radio today by host Al Kresta and asked about the Cardinal’s remarks.
“There is some great irony here of His Excellency speaking at a lavish fundraising event at which one presumes he is about to ask for money for the renovation of the Cathedral, etcetera,” he told Kresta. “Either the Cardinal is possessed of a great insight that no one in that room and few other people are possessd of, or he is speaking economic lunacy.”

Listen to the interview here.

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Blog author: jballor
posted by on Monday, December 1, 2008

Yesterday’s Grand Rapids Press had an attention-grabbing feature graphic, which highlights an online interactive “game” that gives more information about each of the candidates for the “economic blame game” bracket.

Press Graphic/Milt Klingensmith


The four brackets are broken down by group, so the four major categories at fault are 1) the financial industry; 2) consumers; 3) government; and 4) inexplicable forces.

Notably absent are the media (except perhaps as personified in Jim Cramer’s “Mad Money”) and government over-regulation, including especially the Community Reinvestment Act of 1977 and variations on that theme in the intervening decades. To be sure, “deregulation” is a top seed on the government side, and makes the blame game Final Four. But the summary for that option manages to lay the blame on Ronald Reagan and his dictum: “Government is not the answer to our problems. Government is the problem.”

The Press’ pick for the blame game champion is “Fear and Panic.” Writes Press copy editor Dan Hawkins, “So for your consideration, we rounded up 32 suspects and arranged them in a tournament bracket, as we did for White House scandals and the presidential race. For the first time, however, we decided to declare a winner. This crisis, this worst-of-the-worst competition, is too awful to leave without a scapegoat.”

There isn’t really a good representative for what I consider to be greatly culpable, the culture of consumptive capitalism (as opposed to democratic or entrepreneurial capitalism). Consumptive capitalism adds “spend all you can” to the more stable triumvirate of flourishing: earn all you can, save all you can, and give all you can.

And today comes news that confirms that the recession of the US economy began in December of 2007. The Press’ advice for the ordinary American citizen is “Don’t panic.” If that’s true for the everyday American, how much more so for the Christian.

One reality saves us from the necessity to assign blame to others and enables us to accept responsibility. As we begin the season of Advent in 2008, it is proper for us to reflect on the ultimate “scapegoat,” our Lord and Savior Jesus Christ, who bore the sins of the world on the cross, rose again, ascended to heaven, and is seated at the right hand of God the Father.

Turn your eyes upon Jesus,
Look full in His wonderful face,
And the things of earth will grow strangely dim,
In the light of His glory and grace.

This is not to say that we ignore the hard economic realities of our world. But the “fear and panic” created by material concerns need to be put into proper perspective, relativized and mitigated by hope in one whose kingdom will have no end.

Three items have crossed my email inbox over recent weeks that may be of interest to PowerBlog readers. The first two are from the Program in Early American Economy & Society (PEAES).

The Seventh Annual Conference of the Program in Early American Economy & Society conference is titled, “Markets & Morality: Intersections of Economy, Ethics, and Religion in Early North America.” The conference will be held on November 7, 2008, at the Library Company in Philadelphia, PA. There are a number of sessions that look promising, including papers like “The Moral Economy of Competition in Early National New England,” from Jason Opal of Colby College and “A Wealth of Notions: Interpreting Economy and Morality in Early America,” by Christopher Clark, University of Connecticut.

PEAES has also announced its fellowships for 2009-2010, including a resident post-doctoral research fellowship with a stipend of $40,000, a research dissertation fellowship with a stipend of $20,000, and four to six short-term fellowships to scholars at any level of scholarly or professional achievement with stipends of $2,000 each.

Finally, Harvard University will also be hosting a graduate student conference from November 6-8, 2008, titled, “The History of Capitalism in the United States.” The conference is “intended as a forum in which to encourage dialogue, debate and more inclusive approaches to the writing of the history of capitalism in the United States.”

Blog author: jballor
posted by on Tuesday, June 3, 2008

Is this supposed to be capitalism?

Geoff Colvin writes that a motivating factor in the recent crash in corporate profits, as well as the sharp decline in home values, was the phenomenon that “people began to believe that the more they borrowed, the better off they would be. Their thinking went like this: With the cost of capital so low and asset prices rising steadily, risk was evaporating.”

The precipitating cause of the downturn was that consumers “began to live within their means, shutting down the profit-growth machine.”

Any business or industry profit model that depends on consumers driving themselves deeper and deeper in debt is morally flawed and economically unsustainable. That’s not capitalism, that’s consumerism.

Compare the latter with the former, represented by this statement of a first principle of capitalism, “Thrift the First Duty”:

…thrift is mainly at the bottom of all improvement. Without it no railroads, no canals, no ships, no telegraphs, no churches, no universities, no schools, no newspapers, nothing great or costly could we have. Man must exercise thrift and save before he can produce anything material of great value. There was nothing built, no great progress made, as long as man remained a thriftless savage. The civilized man has no clearer duty than from early life to keep steadily in view the necessity of providing for the future of himself and those dependent on upon him. There are few rules more salutary than that which has been followed by most wise and good men, namely, “that expenses should be less than income.” In other words, one should be a civilized man, saving something, and not a savage, consuming every day all that which he has earned.

You don’t need to agree with Andrew Carnegie about everything to recognize the truth of these statements. Thrift is one of the things that separates civilized capitalism from savage consumerism.

Blog author: jballor
posted by on Tuesday, February 5, 2008

From a review in the New Yorker magazine (HT) of David Levering Lewis, God’s Crucible: Islam and the Making of Europe, 570 to 1215, in which the author

clearly regrets that the Arabs did not go on to conquer the rest of Europe. The halting of their advance was instrumental, he writes, in creating “an economically retarded, balkanized, and fratricidal Europe that . . . made virtues out of hereditary aristocracy, persecutory religious intolerance, cultural particularism, and perpetual war.” It was “one of the most significant losses in world history and certainly the most consequential since the fall of the Roman Empire.” This is a bold hypothesis.

To say the least. It is of course true that in the twelfth and thirteenth centuries Muslims had been in possession of a number of Aristotle’s works in Arabic that were not readily available in the Latin West. It isn’t so clear, however, that the depth and breadth of Greek philosophy and the classical virtues were saved by Islamic philosophers during the West’s “dark” ages. There’s much more on that here, including this summary:

The Arabic translations, although they did serve as an early reintroduction for some Western Europeans to Greek thought, didn’t “save” Greek knowledge as it had never been lost. It had been preserved in an unbroken line since Classical times by Greek, Byzantine Christians, who still considered themselves Romans, and it could be recovered there. There was extensive contact between Eastern and Western Christians at this time; sometimes amiable, sometimes less so and occasionally downright hostile, but contact nonetheless. The permanent recovery of Greek and Classical learning was undertaken as a direct transmission from Greek, Orthodox Christians to Western, Latin Christians. There were no Muslim middlemen involved.

In any case, here’s the take of the New Yorker reviewer on Lewis’ book:

I can foresee a time when another matter important to us, the threat of ecological catastrophe, will prompt a historian to write a book in praise of the early Europeans whom Lewis finds so inferior to the Muslims. The Franks lived in uncleared forests, while the Muslims built fine cities, with palaces and aqueducts? All the better for the earth. The Franks were fond of incest? Endogamy keeps societies small, prevents the growth of rapacious nation-states. The same goes for the Franks’ largely barter economy. Trade such as the Muslims practiced—far-flung and transacted with money—leads to consolidation. That’s how we got global corporations.

So, the development of free market economies so often attributed to Western civilization are actually due to Muslim nation-states…and for that reason we ought to prefer European culture!

How refreshing!

Blog author: rnothstine
posted by on Thursday, January 24, 2008
Ronald Reagan delivers his radio commentary

When I lived in Egypt one of the Egyptian drivers for diplomats at the American Embassy in Cairo explained how people had to wait five to seven years for a phone. He proudly stated he was on the list, but poked fun at the long wait for service. Of course, he also added that you might be able to speed the process up by a few months with bribes, or as it is more affectionately knows as in Egypt, “baksheesh.”

Ronald Reagan loved to tell jokes about the former Soviet Union, especially about the stark differences between the United States and Soviet economic systems. It was a tactic he often used to take the hard edge off his criticism of the Soviets, while still drawing sharp contrasts between the competing systems. It also deftly showed his solidarity or sympathy with the Russian people.

Often to the horror of some of his top foreign policy advisers, he loved delivering the jokes directly to Mikhail Gorbachev at summit meetings. Gorbachev would politely smile or sometimes counter by adding that the joke was just a caricature of the Soviet system. But Reagan had carefully collected many of the jokes from former citizens of the Soviet Union, diplomatic officials, and some of them were passed to him by the CIA. Many of them were real jokes that had circulated inside the Soviet Union.

Many of Reagan’s jokes were a critique of the insufficiency of the Soviet system.

A Russian man goes to the official agency, puts down his money and is told that he can obtain delivery of his automobile in exactly 10 years. “Morning or afternoon,” the purchaser asks. “Ten years from now, what difference does it make?” replies the clerk. “Well,” says the car-buyer, “the plumber’s coming in the morning.”

Another joke Reagan liked to deliver summed up his thoughts well. Two Russians are walking down the street, and one says, “Comrade, have we reached the highest state of communism?” “Oh, no,” the other replies. “I think things are going to get a lot worse.” (more…)

Blog author: jballor
posted by on Wednesday, January 23, 2008

Related to John’s post about “natural” capitalism (and as I previously promised in the context of the “new” evangelicalism), I’d like to point to this summary of the contemporary situation from Alasdair MacIntyre’s After Virtue, speaking of a left/right political divide:

This bifurcation is itself an important clue to the central characteristics of modern societies and one which may enable us to avoid being deceived by their own internal political debates. Those debates are often staged in terms of a supposed opposition between individualism and collectivism, each appearing in a variety of doctrinal forms. On the one side there appear the self-defined protagonists of individual liberty, on the other the self-defined protagonists of planning and regulation, of the goods which are available through bureaucratic organization. But in fact what is crucial is that on which the contending parties agree, namely that there are only two alternative modes of social life open to us, one in which the free and arbitrary choices of individuals are sovereign and one in which the bureaucracy is sovereign, precisely so that it may limit the free and arbitrary choices of individuals. Given this deep cultural agreement, it is unsurprising that the politics of modern societies oscillate between a freedom which is nothing but a lack of regulation of individual behavior and forms of collectivist control designed only to limit the anarchy of self-interest. The consequences of a victory by one side or the other are often of the highest immediate importance; but, as Solzhenitzyn has understood so well, both ways of life are in the long run intolerable. Thus the society in which we live is one in which bureaucracy and individualism are partners as well as antagonists. And it is the cultural climate of this bureaucratic individualism that the emotivist self is naturally at home.

There has been a lot of confusion over Mike Huckabee’s invocation of the term “vertical politics,” but I think it is one attempt (perhaps futile) to come to terms with this feature of modern political life. The fact that the chattering classes exist in a two-dimensional realm explains why they have trouble understanding such attempts at transcending a binary political continuum. Such attempts at transcendence seem to me to be necessary given a view that holds to a hierarchy of moral goods (perhaps a minority view, nowadays).