Posts tagged with: economics

One of the most basic forms of entertainment that friends and families share together is playing board games, such as Monopoly or Risk. While we may not realize is how much these games are teach us about economic ideas such as trade or scarcity.

I must confess I’m a bit of a board game snob. I don’t really care for common games like Monopoly as I prefer so-called “designer” games such as the Settlers of Catan or Power Grid. In an article for the Washington Post, Blake Eskin calls Settlers the “board game of our time.”

Eskin explains that Monopoly had an appeal in the depression-era because it allowed poor kids the opportunity to feel rich and successful for a day. He also mentions several of the reasons I do not care for Monopoly: It takes several hours to play; the outcome is too dependent on luck; it can often become clear who is going to win far before the game actually ends, etc. It is also an elimination game, meaning that an early loser can be stuck with nothing to do for hours while their friends finish the game.

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I belong to the Christian Reformed Church, and our synod this year decided to formally adopt a report and statements related to creation care and specifically to climate change. I noted this at the time, and that one of the delegates admitted, “I’m a skeptic on much of this.”

He continued to wonder, “But how will doing this hurt? What if we find out in 30 years that numbers (on climate change) don’t pan out? We will have lost nothing, and we’ll have a cleaner place to live. But if they are right, we could lose everything.”

Over at Think Christian today, I reflect on the delegate’s question and try to begin to answer it in “Climate change and the church.” I do so primarily by attempting to inject the idea of opportunity cost into the discussion about climate change and specifically ecclesial responses.

This recognition of opportunity cost is closely identified with a central insight of economics, and it is informative to see how natural scientists and social scientists, like economists, approach the question of climate change. It’s also intriguing to see whether and how these two different groups are given platforms to speak to (and sometimes for) the church. Robert Murphy has a lengthy and worthy entrance into this broader discussion, which includes this critical observation about the insights of economists on the climate question:

The general public has no idea that the “consensus” (if we wish to use such terminology) of economic studies shows net benefits from anthropogenic climate change for decades.

Are the conclusions of such economic studies relevant to the question of how churches, groups of Christians, and individuals address the question of climate change? I submit that they are. And I also submit that Murphy’s general conclusion should chasten the confidence with which non-experts (which includes nearly everyone involved in church leadership) engage these issues:

The scientific modeling of climate change, and its possible impacts on human welfare, are very technical areas requiring years of study to master. When experts try to summarize the fields for the layperson, they sometimes present matters in misleading ways, however inadvertent.

Blog author: aknot
posted by on Wednesday, July 18, 2012

That’s the question asked at the “Economics for Everybody” blog. The answer? A resounding yes:

Work is important to God. It’s so important that He put Adam in the garden “to work it and keep it.” God took His creation and assigned it to Adam “to fill and subdue.” That sounds like work to me.

So, what does this have to do with economics?

The Bible shows us economics begins with work. God demonstrated this with His own creative action, then told Adam to follow His example. But it’s not work for work’s sake, or even work for Adam’s sake. It’s work for God’s sake.

This is the point of God commanding Adam to do specific things. Theologians often refer to these initial commands as the “creation mandate.” They are binding for everyone in the world. You could say the creation mandate is pressed into our DNA. We were designed to follow God’s commands. It’s our purpose in life.

Now when you follow someone’s commands, it means you’re ultimately working for them. In other words, with the creation mandate, God made us stewards of the creation. According to Genesis 1 and 2, our primary job as stewards is to have families and manage God’s property for their provision, all the while enjoying a close relationship with Him.

The article goes on to note that stewardship necessitates choices, and choices are foundational to economic thinking. Be it naming animals, investing, farming, or leading a family, daily tasks of stewardship are marked by the choices they demand. These choices require a broadened sense of economic thinking and force us to reckon with economics as a serious field of thought and study in the created world.

The article concludes:

This means economics starts with work, is driven by choices, and is guided by God’s commands. We could sum it all up by saying ‘economics is the study of the choices we make while using our limited resources in order to be good stewards before God.’

Complete article here.

Conference: “Free Markets with Solidarity and Sustainability: Facing the Challenge”

Ethical human agency is only possible with freedom. Freely turning to the good, which the Creator has given us, is the highest sign of human dignity. The proper exercise of freedom requires “specific conditions of an economic, social, juridic, political and cultural order”. (Compendium of the Social Doctrine of the Church, n. 137) The free market is one of these institutions. The free market is the most efficient instrument to guarantee the distribution of goods and services in society. Beyond efficiency, however, markets need sound ethical and cultural foundations. Only free markets can be ethical markets, and only ethical markets can function in freedom. One of these primary and universally recognized ethical principles is charity.

Call for Papers: “The State of the Consecrated Life in Contemporary Canada”

We are pleased to announce an extended deadline for the Call for Papers for the “State of the Consecrated Life in Contemporary Canada” Conference to be held on 25-26 January 2013 in Montreal, Quebec. This conference is held as a part of a Social Sciences and Humanities Research Council of Canada research grant that explores the state of consecrated life in contemporary Canada and seeks will bring together leading researchers from Canada and abroad to share research and insights on this important subject. For more information, please see the attached document or the conference website: www.consecratedlife.ca. The new deadline will be 31 July 2012. Please forward this information to any colleagues, students or contacts who might be interested.

Call for Papers: “Mighty Protectors for the Merchant Class: Saints as Intercessors between the Wealthy and the Divine”

International Congress on Medieval Studies, 9-12 May 2013. By the late medieval period, merchants formed an integral part of urban society; among their activities, they facilitated trade between city centers, participated in the governing of cities, and were patrons of churches and monasteries. At the same time, the wealth that they amassed and their sometimes morally dubious activities, such as money lending, often left merchants fearful of what the afterlife would bring, causing them to appeal directly to specific saints for intercession. This session seeks to explore the religious lives of these elite members of urban society, specifically considering the individual saints to whom merchants appealed for their earthly protection and heavenly salvation as well as the manner in which they made these appeals.

Call for Papers: “Technology and Human Flourishing”

2012 Baylor Symposium on Faith and Culture (Thursday, October 25-Saturday, October 27) Technology changes us—and the world around us—in countless ways. It eases our labor, cures diseases, provides abundant food and clean water, enables communication and travel across the globe, and expands our knowledge of the natural world and the cosmos. The stuff of science fiction is now, in many cases, reality, and it can make our lives longer, healthier, and more productive than ever. But technological advance is not without complication, and even ardent proponents of technology recognize that our present age of innovation is fraught with concern for unintended consequences.

Paper: “The Decision to Delay Social Security Benefits: Theory and Evidence”
John B. Shoven and Sita Nataraj Slavov, NBER Working Papers

Social Security benefits may be commenced at any time between age 62 and age 70. As individuals who claim later can, on average, expect to receive benefits for a shorter period, an actuarial adjustment is made to the monthly benefit amount to reflect the age at which benefits are claimed. We investigate the actuarial fairness of this adjustment. Our simulations suggest that delaying is actuarially advantageous for a large subset of people, particularly for real interest rates of 3.5 percent or below.

If you, or someone you know, are searching for last-minute scholarship opportunities, I invite you to please take the time to learn more about the scholarship programs offered through the Acton Institute.

Through the Calihan Academic Fellowship program, Acton’s Research department offers scholarships and research grants from $500 to $3000 to graduate students and seminarians studying theology, philosophy, economics, or related fields. Applicants must demonstrate the potential to advance understanding in the relationship between theology and the principles of the free and virtuous society. Such principles include recognition of human dignity, the importance of the rule of law, limited government, religious liberty, and freedom in economic life. Please visit the Calihan Academic Fellowship page on our website to download applications and obtain additional information about eligibility, conditions, the selection process, application requirements, and deadlines. In order to qualify for the upcoming deadline for the 2012 Fall Term, all application materials must be postmarked by July 15.

Blog author: ckaupke
posted by on Friday, June 29, 2012

Frédéric Bastiat (1801-1850)

This Saturday, June 30, is the 211th birthday of Frédéric Bastiat, one of the greatest political philosophers of the modern era. Considered among the founding fathers of classical liberalism, Bastiat is known for his simple and direct explanations of political and economic realities, his arguments against oppressive economic regulations and his clear and concise vision of a government of limited, enumerated powers, operating under the rule of law and unencumbered by favoritism or distributionist policies.

Bastiat drew on his Catholic faith and the writings of Adam Smith and John Locke to articulate a vision of limited, efficient government that respects each citizen’s God-given dignity, strictly adheres to the rule of law, and allows for a largely un-regulated economy in which individuals are free to pursue their interests through peaceable exchange with each other. His best-known works, and those most central to his ideas, are The Law and The Seen and the Unseen, articulating his central political and economic ideas, respectively. (more…)

In response to the Supreme Court ruling on Obamacare’a individual mandate, National Review Online launched a symposium — a roundup of commentary — which posed the following question: “What’s next for both conservatives and the Republican party on health-care reform?” Acton Research Director Samuel Gregg contributed this analysis:

Leaving aside the arguments that will continue about the SCOTUS ruling on Obamacare, one response of those who favor free markets and limited government must be for them to start preparing themselves for what will eventually happen, regardless of the results of the 2012 presidential election. And that’s Obamacare’s eventual economic demise. The economic track record of socialized medicine is very clear. Sooner or later, it implodes. Britain’s National Health Service is a perfect example. Even Sweden has realized that socialized medicine (and generous welfare states more generally) are unaffordable in the long term, and it has begun allowing private providers into its health-care market. In short, Obamacare’s essential economic unfeasability and extensive bureaucratization of health care (not to mention its disproportionately negative impact on the poor) will become all too clear in time. When that happens, conservatives must have off-the-shelf plans ready to go in order to restore sanity to the asylum of socialized medicine.

However, it’s also plain that conservatives, beyond citing the raw economics of real health-care reform, must ballast their case against socialized medicine with moral and cultural arguments. Far too many conservatives and free marketers critique socialized medicine almost solely in terms of efficiency and effectiveness. Economic analyses and arguments are important, but not many people will put everything on the line for a calculus of utility. Instead, critics must draw attention to the ways in which socialized medicine (1) saps personal responsibility, (2) facilitates the spoiled-brat entitlement mentality presently reducing much of Europe to an economic laughingstock, and (not least among such concerns) (3) creates an impossible situation for those of us who on grounds of faith and reason cannot and will not participate in schemes that legally require us to cooperate in other people’s choices for moral evil.

We can win numerous economic arguments. In some respects, that’s actually the easy part. But until we decisively shift — and win — the moral debate, the battle will be uphill all the way.

Read other viewpoints on NRO’s “What’s Next for the Opposition?”

The new issue of the Journal of Markets & Morality

The Spring 2012 issue of the Journal of Markets & Morality (15.1) has been posted at www.marketsandmorality.com and should be arriving in print to our subscribers sometime soon in the coming weeks.

In this issue, Jordan Ballor addresses Christian attitudes toward business across confessional lines and throughout history in his editorial. Sam Gregg and Philip Booth respond to Daniel K. Finn’s Controversy contribution from last issue. In further exploration of the convergence (or lack thereof) between libertarian philosophy and Roman Catholic social teaching, Bridget Kratz and Walter Block argue for common ground on the topic of immigration. Charles McDaniel and Marek Tracz-Tryniecki engage the all-too-relevant subject of financial crisis, the former pointing to insights from the Austrian, post-Keynesian, and Distributist schools of thought and the latter in the thought of Alexis de Tocqueville. Edward O’Boyle and Walter Schweidler (translated by Philip Harold) each offer contributions on the subject of human development. Johan van der Vyver examines federal and family barriers to children’s rights. Hunter Baker reflects on social justice, government, and society. Michael D’Emic demonstrates the logical identity of the sixteenth-century, Spanish scholastic Saravia de la Calle’s understanding of just price and modern equilibrium theory. Matthew McCaffrey engages three recent works on the morality of the marketplace in his review essay. We have another installment of our Symposium, offering papers from the Evangelical Theological Society’s Theology of Work and Economics consultation. This issue also has yet another stellar Reviews section (if I do say so myself). And lastly, this issue’s Scholia offers an update and translation (respectively) of two works of the English bishop John Jewel on the moral issue of usury, a selection from his commentary on 1 Thessalonians and some private notes that were written in Latin and never before translated into English.

Needless to say, it’s a full issue.

The release of issue 15.1 means that now content from 14.1 is open access to non-subscribers. Given the current financial climate, I would highly recommend James Alvey’s article “James M. Buchanan on the Ethics of Public Debt and Default.” I would gladly detail the whole contents of this issue as well, but I think I’m out of breath.

One of the most worrisome economic troubles coming down-the-pipe is the “student debt bubble” which many argue is caused by too many students seeking degrees in higher education as the costs of tuition increase. Because we understand that poverty and economic misfortune are serious barriers to human flourishing, it is very important to try and understand the economics involved in the education market. Dylan Pahman gave a good explanation earlier today about how administrative costs are rising to promote a myriad of diversity-advocacy programs, a process which is clearly affecting  the supply-side of the issue. What about the demand side where students are making the decision to go to college?

How is it that so many students are making a seemingly irrational choice? In a post at strategyprofs, Steve Postrel explains here that while it may be true that college degrees may be becoming more common and watered down in the quality of education they represent, that it is also true that high school quality is dropping. This means that college degrees represent a greater increase in knowledge than they used to, signaling a greater value relative to non-college educated persons.

Typical graduate business school education has indeed become less rigorous over time, as has typical college education. But typical high school education has declined in quality just as much. As a result, the human capital difference between a college and high-school graduate has increased, because the first increments of education are more valuable on the job market than the later ones. It used to be that everybody could read and understand something like Orwell’s Animal Farm, but the typical college graduates could also understand Milton or Spencer. Now, nobody grasps Milton but only the college grads can process Animal Farm, and for employers the See Spot Run–>Animal Farm jump is more valuable than the Animal Farm–>Milton jump.

So the value of a college education has increased even as its rigor has declined, because willingness to pay for quality is really willingness to pay for incremental quality. This principle holds true in many markets.

Interestingly, one of the best ways to help lower the cost of college education might to be to improve the quality of education that a high school diploma represents. Understanding why high school education is declining requires us to think beyond a knee jerk “just spend more” reaction and understand that our current public education system is insulated against the processes that wipe out nearly all other inefficient and inferior services: the market.

To effectively help others become productive agents in the market and realize their vocations, we need to advocate for steps that will cause education at all levels to reflect a true added value. School choice seems to be an obvious candidate for improving educational outcomes.

H/T Marginal Revolution

In a follow up interview to “Is Capitalism Immoral?,” Joseph E. Gorra on the Patheos Evangelical channel talks with Rev. Robert A. Sirico, Acton Institute president and co-founder, about the publication of his new book, Defending the Free Market: The Moral Case for a Free Economy. Gorra begins the interview by observing that “within Western societies today there appears to be a kind of fact/value dichotomy that operates as an assumption in much of our discourse, where questions of ‘economics’ (and the sciences in general) are in the category of knowledge and facts and therefore tend to trump questions of theology.”

Patheos: The dichotomous fact/value assumption also stunts our comprehension of what is true.

Sirico: It’s also true that some economists become hegemonic in thinking that the whole of truth is seen through their particular lens of expertise, rather than appreciating the immense complexity of humanity and situating their part of the truth within the broader truth of who the human person is. But that’s not just a problem for some economists—scientism infects almost every discipline that has a strong empirical element.

It would be humorous, if it were not tragic, when one becomes so blinded by the subjectivism of such relativism that they accuse others of what they themselves are infected with. What I am trying to do is broaden our comprehension of the truth that permeates everything—in the case of my book, how the economic can be seen to emerge from a reflection of human nature and empower us to do the good intentionally.

Read “Does Capitalism Promote Greed?: An Interview with Father Robert Sirico, Part 2″ on the Patheos Evangelical channel.