After being sentenced to federal prison in 2001 for racketeering, Louisiana’s former governor Edwin Edwards, long famous for his corruption and political antics, humorously quipped, “I will be a model prisoner as I have been a model citizen.” In his 1983 campaign for governor against incumbent David Treen, Edwards bellowed, “If we don’t get Dave Treen out of office, there won’t be anything left to steal.” The kind of illegal corruption once flaunted by Edwards is on the decline. There is less of a need. Legal corruption in government is more prevalent and easy enough to secure. (more…)
Rev. Robert Sirico was recently featured in El Salvador’s newspaper El Diaro de Hoy. Consuelo Interiano interviewed him about the free market, and social mortgage.
Sirico begins by saying that private property isn’t just important for businesses to thrive, it’s absolutely necessary for their existence. He goes on to say that businesses and private companies are the best way to help individuals escape poverty. Companies, large or small, create opportunities for work and offer individuals a means to elevate themselves out of poverty.
John Paul II said the Church “has consistently taught that there is a ‘social mortgage’ on all private property.” For those not familiar with the term ‘social mortgage,’ it refers to the conditions under which people may use God’s creation. In other words, if you have private poverty you have a duty to be productive with it. Sirico responds to this by saying that the free market is a means to productivity and therefore social mortgage. He explains that one should not assume that the Catholic Church promotes socialism or communism.The duty of social mortgage falls on the shoulder of private property (which does not exist in these economic systems). He goes on:
My defense of the free market is not a defense of crony capitalism, not a defense of mercantilism, not a defense of banks or entrepreneurs who buy the courts, who buy the states, because these people act exactly against the free market.
Rev. Sirico bases his explanations of the free market and the role of businesses on the book of Genesis. It says that human beings were created in order to exercise creativity and rule over all of creation.
To read the full article in Spanish, please visit ElSalvador.com.
Brian Burrough has a mostly enjoyable New York Times review of a book that’s mostly positive about my native state’s mostly small-government formula for economic growth. Some excerpts:
Ms. Grieder, a onetime correspondent for The Economist who now works at Texas Monthly, and a Texan herself, has written a smart little book that … explains why the Texas economy is thriving. It’s called “Big, Hot, Cheap and Right: What America Can Learn from the Strange Genius of Texas”….
What might be copied, Ms. Grieder indicates, is the so-called Texas model — that is, a weak state government with few taxes and fewer regulations and services. It would be far harder to replicate the state’s civic DNA, which features traits that can be traced to its decade, beginning in 1836, as a stand-alone nation (independent, suspicious of Washington), the late-1800s cowboy era (self-reliant, fraternal) and the 20th-century introduction of oil and entrepreneurialism (pro-business, skeptical of government)….
Outside writers have been regularly caricaturing the state since the novelist Edna Ferber introduced America to postwar Texas with “Giant” in 1952. The canon ranges from “The Super-Americans,” by John Bainbridge (1961), to “As Texas Goes … : How the Lone Star State Hijacked the American Agenda,” by Gail Collins, a New York Times columnist (2012). Ms. Grieder’s is the rare book that takes stock of the Texas model without ridiculing many of its traditions and politicians.
My one concern is that the book’s author seems enamored of Gov. Rick Perry’s crony capitalist strategy of using subsidies to attract companies to the Lone Star State, a habit that is anything but small government and likely to come back to bite. On the whole, though, the book and the book review appear to give far more props to low taxes and limited government than I thought possible for a work endorsed in the pages of The New York Times. Maybe there’s hope for those city slickers after all.
“What’s a crony? It’s like having a best friend who gives you other people’s stuff.”
Alejandro Chafuen, president and chief executive officer of Atlas Economic Research Foundation and board member of the Acton Institute, recently wrote a piece for Forbes.com about crony capitalism.
Chafuen used to spend his summers in Argentina, so he begins his article with a story about a friend from Argentina. Enrique Piana, known to his friends as “Quique,” was heir to “Argentina’s oldest and most respected trophy and medals companies.”
During part of the ’90s, the government of President Carlos Menem, and then-Minister Domingo Cavallo, had a policy for the importation of gold and exports of gold fabrications that amounted to a major subsidy for exporters. Attracted by the incentives, Quique, who had become CEO of his company, became a key player in a scheme whereby exporting overvalued gold-plated products netted them 30 million in subsidies for fake transactions. As it seems that none of the medals were sold at artificial value to true customers, the only victims here ended up being the Argentine tax-payers.
The scheme involved a “business” in the United States. As there is still substantial respect for rule of law in the United States, Quique was indicted, captured, and—after some months in a U.S. jail—extradited to Argentina. In his book, he lists the government officials who he claims knew about the scheme and who received bribes for his fraudulent activities. I will not mention them here. None of them were sentenced to jail. (more…)
The morticians wanted the monks shut down—or even thrown in jail—for the crime the Benedictines were committing.
Until 2005, the monks of St. Joseph Abbey in St. Benedict, Louisiana had relied on harvesting timber for income. But when Hurricane Katrina destroyed their pine forest they had to find new sources of revenue to fund the 124-year-old abbey. For over 100 years, the monks had been making simple, handcrafted, monastic caskets so they decided to try to sell them to the public.
According to the Wall Street Journal, after a local Catholic newspaper publicized the effort in 2007, local funeral directors got the Louisiana State Board of Embalmers and Funeral Directors—of which eight of the nine members are funeral industry professionals—to serve the abbey with a cease-and-desist order. Louisiana law makes it a crime for anyone but a licensed parlor to sell “funeral merchandise.” Violating the statute could land the monks in jail for up to 180 days.
Since the sole purpose of the “casket cartel” law is to protect the economic interest of the funeral industry, the Institute for Justice filed a federal lawsuit on behalf of the monastery claiming the legislation restricts “the right to earn an honest living just to enrich government-licensed funeral directors.”
Yesterday, the 5th U.S. Circuit Court of Appeals issued a unanimous final decision in favor of the casket-making monk, setting up what could become a historic clash at the U.S. Supreme Court. The Court of Appeals rejected Louisiana’s argument that it was constitutional to enact a law forbidding anyone but a government-licensed funeral director from selling caskets, especially if the only purpose of the law is to make funeral directors wealthier by limiting competition. In other words, the Court didn’t buy the State’s argument that crony capitalism is constitutionally protected.
Georgene Rice recently interviewed Samuel Gregg about his latest book, Becoming Europe: Economic Decline, Culture, and How America can Avoid a European Future. Her show airs on KDPQ FM in Portland, Oregon.
Rice says that Becoming Europe is “sobering, but not hopeless.” She says that it
Exposes the true scope of the crisis gripping our transatlantic cousins: the crush of economic debt, governments consuming close to 50 percent of the economy, high taxation, sharply aging populations, crony capitalism, and staggeringly high numbers of public sector workers being supported by an ever dwindling class of private sector employees. Most alarmingly, the book Becoming Europe reveals that America has already moved in the direction of the European state, much closer than most Americans realize.
Listen to the full interview here:
You can learn more about Becoming Europe and Samuel Gregg here.
Sojourners’ Jim Wallis has been at the Davos gathering in Switzerland and is urging us to be guided by a new Davos “covenant.” If you’ve never heard of Davos, Michael Miller’s RealClear Politics piece “Davos Capitalism” describes the gathering and its unassailable hubris this way:
Davos capitalism, a managerial capitalism run by an enlightened elite–politicians, business leaders, technology gurus, bureaucrats, academics, and celebrities–all gathered together trying to make the economic world smarter or more humane…. And we looked up to Davos Man. Who wouldn’t be impressed by the gatherings at the annual meeting of the World Economic Forum at Davos, a Swiss ski resort? Sharply dressed, eloquent, rich, famous, Republican, Democrat, Tory, Labour, Conservative, Socialist, highly connected, powerful and ever so bright.
Then, when the whole managerial economy collapsed, the managers and technocrats lost faith in markets. But they did not lose faith in themselves, and now they want us to entrust even more of the economy to them.
As if on cue, Jim Wallis writes in a recent public letter:
This week at the World Economic Forum in Davos, Switzerland, we are looking to the future and asking “what now?” At a Saturday session — “The Moral Economy: From Social Contract to Social Covenant” — a document will kick off a year-long global conversation about a new “social covenant” between citizens, governments, and businesses.
Why dispense with the yeomen-like “contract” language in favor of a new “social covenant”? Wallis explains that “in the past 20 years, the world has witnessed the death of social contracts. We have seen a massive breakdown in trust between citizens, their economies, and their governments…. Former assumptions and shared notions about fairness, agreements, reciprocity, mutual benefits, social values, and expected futures have all but disappeared. The collapse of financial systems and the resulting economic crisis not only have caused instability, insecurity, and human pain; they have also generated a growing disbelief and fundamental distrust in the way things operate and how decisions are made.” (more…)
I recently asked the question at Ethika Politika, “Which Capitalism?” (also the title of my article), and I followed it up with a related question here regarding the relationship between distributism and capitalism (is the former a form of the latter?). In addition, Jordan Ballor reflected last week on the different orientation of definitions of capitalism and socialism, observing, “One definition [i.e. capitalism] is focused on structure, the other [i.e. socialism] is connected with moral ideals.”
Google Chairman Eric Schmidt defended the company’s practices [of taking certain tax exemptions], saying:
We pay lots of taxes; we pay them in the legally prescribed ways…. I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate.
So far so good. He didn’t make the rules that privilege his firm, but he will avail himself of these privileges when offered. I can sympathize. I oppose the mortgage interest deduction but still take it every April. Schmidt’s next statement, however, is about as far from the mark as one can get:
It’s called capitalism…. We are proudly capitalistic. I’m not confused about this.
A quick lesson for Mr. Schmidt: genuine capitalism is about competing on a level playing field for customer dollars. If you offer a superior product or service, customers will reward you by voluntarily parting with their money in exchange for what you offer. (more…)
Speaking at a conference at Bethel College, Acton’s Director of Media, Michael Miller, told the audience that while good intentions are necessary in the fight against poverty, they simply aren’t enough. Miller spoke directly on the topic of foreign aid to developing nations:
Western countries providing financial aid to developing nations seems to make sense, but there is no correlation between the extent of aid and economic progress in those countries, Miller said.
Much of the aid goes to foreign governments and helps subsidize corruption, Miller said. “It’s not actually going to the people,” he said, referring to that system as “crony capitalism.”
And some of the aid goes to subsidize Western companies, which enter poor nations and provide goods or services instead of promoting the ability of residents to establish their own businesses, he said.
“People are saying, ‘We don’t want any more aid. Stop helping us,’ ” Miller said.
Miller, leader of the PovertyCure initiative, noted that free markets offer the best hope for developing nations and their economies. Allowing the people in the developing world to take responsibility for their own economic progress shifts the focus from foreign aid to local businesses, creating sustainable jobs.
Read “Speaker questions providing aid to poor around the world” in the South Bend Tribune.