Posts tagged with: economics

Reflecting on the pontificate of Pope Benedict XVI, Philip Booth, professor at Cass Business School in London, says the pope was clear on his economic ideas.

As he said in Caritas in Veritate: “Economy and finance, as instruments, can be used badly when those at the helm are motivated by purely selfish ends. But it is man’s darkened reason that produces these consequences, not the instrument per se”. In other words, credit derivative swaps are not evil, but those who abuse them might be.

He had a similarly wise understanding of the problems facing the welfare state. As he stated elsewhere: “There will always be suffering which cries out for consolation and help. The state which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy, incapable of guaranteeing the very thing that the suffering person needs: namely, loving personal concern. We do not need a state which regulates and controls everything”. Solidarity as a virtue is far superior to an intrusive welfare state.

Booth goes on to say that Benedict, in this same encyclical, states that the state’s role is to serve, and that family and civil society must take priority over the state.

Read “Pope Benedict saw why the capitalist system is virtuous” at City A.M.

Philip Booth is author of International Aid and Integral Human Development, available in the Acton Book Shop. He is author of the Acton Commentary, “Solidarity, Charity and Government Aid.”

As occurrences of preventable diseases increase and the debt deepens, some look to “sin taxes” as an easy to solution to both problems. Thirty-three states have even gone as far as to implement a soda tax in an attempt to curb obesity. At first glance sin taxes seem to be a good idea, but they can actually cause more harm than good.

The Mercatus Center at George Mason University has just published a working paper on sin taxes and their negative effects. The study was conducted by Adam J. Hoffer, William F. Shughart II, and Michael D. Thomas.  They have found that taxing specific goods or services based on perceived “negative externalities their consumption generates”  is an ineffective source of revenue.

The authors summarize their findings in a recent U.S. News and World Report op-ed:

  • Lobbying: Millions of dollars have been spent to thwart taxation of the soft drink industry’s products and to prevent existing taxes from being raised. In 2009 alone, the industry spent more than $57 million on lobbying. Such lobbying expenditures are socially wasteful. How much money is now being spent attempting to block Mayor Bloomberg’s ban on 32-ounce soft drink containers?
  • Regressive taxation: Far from being income-neutral, such taxes are regressive because their burden falls most heavily on people with the fewest options—the poor. Low-income households who continue to purchase goods that are sin-taxed will have even less money left over to spend on other items.
  • Revenue not used for its intended purpose: Sin taxes raise revenue by transferring money from those who continue to buy the taxed items straight to the coffers of the public treasury. Taxing sin might be reasonable if the revenue from these taxes was used to address the underlying negative consequences of consumption. In the real world, however, money generated by the tobacco settlement financed general spending and not smoking cessation programs or treating smoking-related diseases. The social security trust fund has been replaced with treasury IOUs, and the highway trust fund filled by taxing the sin of driving will fail to meet obligations as early as 2015.

You can read the entire working paper, “Sin Taxes: Size, Growth, and the Creation of the Sindustry” here. Acton president and co-founder, Rev. Robert Sirico has also written about the consequences of sin taxes. You can read his “Hate the Sin, Tax the Sinner?” here.

After decades of bloody turmoil between Protestants and Catholics in Northern Ireland, on March 26, 2007, Ian Paisley and Gerry Adams, sitting side-by-side at Stormont confirmed that power-sharing will return to Northern Ireland on May 8th of that same year. It was supposed to be a “new era.” Unfortunately, in order for Ireland to recover from decades of a very complicated history it needs a growing economy. Northern Ireland’s economy is in steep decline because it remains such a high-taxed welfare state.

For example, jobless remains at extremely high levels. The BBC reports that between June and August of 2011 8.1% of the population were unemployed. In fact,

Over the year, the number of people claiming unemployment benefit has increased by 4.8%, to 63,400, while in the UK as a whole the figure has fallen by 1.4%. A large proportion of the unemployed are young people, with 21.1% of those between aged between 18 and 24 now unemployed, up 3.0% over the year.

Northern Ireland also has high minimum wage rates—about $7.87/hr for workers 18-20 years-old—and a ridiculous corporate tax rate of 24%. This “one-two punch” does nothing but discourage the starting of new businesses, foreign direct investment, and provide incentives for companies not to hire young people. The Central Bank of Ireland, in a moment of common sense, now believes that maybe, just maybe, high corporate taxes stifle job creation. According to the BBC,
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Blog author: jcarter
Friday, February 8, 2013
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In this abridged version of the video series Economics for Everybody, R.C Sproul Jr. explains why it’s important for Christians to understand economics. Economics Has Consequences pulls together some of the key aspects of the original series into one film, including introductions to such basic principles of economics as stewardship, civil government, work, wealth, and entrepreneurism. The second section explores the impact of government intervention on education, the money supply, welfare, depressions, markets, and more.

The video shows why economic freedom is directly related to religious freedom, and that the loss of one inevitably leads to the loss of the other.

JMM_15.2_WebThe newest issue of the Journal of Markets & Morality has been published. The issue is available in digital format online and should be arriving in print in the next few weeks for subscribers. This issue continues to offer academic engagement with the morality of the marketplace and with faith and the free society, including articles on economic engagement with Pope Benedict XVI’s encyclical letter Caritas in Veritate, biblical teaching on wealth and poverty, schools as social enterprises, the Reformed philosopher Herman Dooyeweerd’s economic theory, and much more.

As we have done in the past, Jordan Ballor’s editorial is open access, even to non-subscribers. In “Between Greedy Individualism Editorial and Benevolent Collectivism” he examines the enduring impact of Michael Novak’s The Spirit of Democratic Capitalism, writing,

At the time of its publication, Novak’s work must have been like a window thrust wide open in a dank room, introducing a breath of fresh air and the sanitizing rays of sunlight. Against ideologies that posit state power as a neutral or even benevolent force arising of necessity against the rapaciousness of the market, Novak observed instead that it was democratic capitalism that arose first as a system designed to check the invasiveness of state tyranny. The “founders of democratic capitalism,” wrote Novak, “wished to build a center of power to rival the power of the state.” Indeed, “they did not fear unrestrained economic power as much as they feared political tyranny.” Still more would they fear the union of economic and political power that we find all too often today in corrupt and cronyist regimes.

You can read his full editorial here. (more…)

Over at Fieldnotes Magazine, Matthew Kaemingk offers a good reminder that in our social solutions-seeking we needn’t be limited to thinking only in terms of market and state. By boxing ourselves in as such, Kaemingk argues, Christians risk an overly simplistic, non-Biblical view of human needs and human destiny:

When presented with almost any social problem (education, health care, poverty, family life, and so on), today’s leaders typically point to one of two possible solutions—a freer market or a stronger state. But in opposition to these rather myopic solutions, I think there is a more complex and biblical lens through which leaders can consider the social eco-system and the people who move around in it.

Instead of simplistic descriptions of human beings as either clients of the state or competitors in the market, the Christian Scriptures present humanity in a refreshingly complex way. We find a complex creature with a wide variety of gifts, abilities, interests, aspects, loyalties, and solidarities. Created in the image of God, human beings in the Bible are anything but simple. They are musical, communal, religious, artistic, familial, charitable, scientific, literary, moral, athletic, fun, and funny. The robust anthropology found in the Bible depicts a creature that could never be fully defined, controlled, content, or nourished by the market or the state alone—thank God.

This perspective ties in well with Rev. Robert Sirico’s final chapter in his book, Defending the Free Market, where he criticizes the popular notion of homo economicus, from which plenty of bad economic policy and market decision-making has been generated:

Any man who was only economic man would be a lost soul. And any civilization that produced only homines economici to fill its markets, courts, legislative bodies, and other institutions would soon enough be a lost civilization. Familial love, voluntary dedication to philanthropy and faith, the creation of art and music would be at their most minimal level, and whole sectors of life would completely vanish. Focusing the whole of life on the acquisition of quantifiable goods does not bring true happiness or peace, as almost everyone knows. We all have material appetites, but we do not (pray God) always feed them…Human beings find ultimate fulfillment not in acquisition but in developing, sharing, and using their God-given creative capacities for good and giving themselves to others. (more…)

480px-Candlemas_(Greece,_Benaki,_17_c.)In the most recent issue of Theosis (1.6), Fr. Thomas Loya, a Byzantine Catholic priest, iconographer, and columnist, has an interesting contribution on the upcoming feast of the Presentation of Christ at the Temple (also known as Candlemas or the “Meeting of the Lord”). For many, February 2nd is simply the most bizarre and meaningless American holiday: Groundhog Day. However, for more traditional Christians, this is a major Christian feast day: the commemoration of the forty day presentation of Christ at the Temple in Jerusalem (December 25 + 40 days = February 2; for the biblical account, see Luke 2:22-40).

In his installment on “Applied Byzantine Liturgy” (pp. 54-56), Loya writes regarding this feast that it, like all liturgy, transforms our vision and thereby ought to be “applied to every aspect of life.” He writes,

When we say, “applied to every aspect of life” we really, really meant it: the economy, the environment, politics, education, healthcare, marriage, family, sexuality, law, work, unions, management, etc, etc. Did you notice how many of the words in this last sentence were some of the “hot button” words of our day? Have you also noticed how none of the areas that these words denote is functioning well today? There is one reason—lack of the correct vision and the application of the correct vision. (more…)

Blog author: ehilton
Wednesday, January 23, 2013
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The wildly-popular BBC production, “Downton Abbey” has offices buzzing on Monday mornings. Like the “Upstairs, Downstairs” of old, “Downton” provides the viewer with two distinct lifestyles in one house: that of Lord and Lady of the manor and of the staff that runs the place.downtonabbey

Despite the lavish lifestyle of the fictitious Grantham family, Great Britain in the 1920s was economically stagnant. One percent of the nation held two-thirds of the nation’s wealth, but weren’t investing it. The ruling elite was financially idle – giving and attending parties, while thinking they were doing their part by employing scads of household servants. Running an actual business?  Actually creating jobs? Beneath one’s station in life. (more…)

Author of “Becoming Europe” and Acton’s Director or Research, Samuel Gregg, will be at The Heritage Foundation on Thursday, February 7 to speak on “Economic Decline, Culture, and How America Can Avoid a European Future.” The event can be attended in person or viewed online. Visit the Heritage events page for more details.

Read an excerpt of “Becoming Europe” and purchase the book here.

Registration is now open for Acton University, planned for June 18-21, 2013. Courses for this year’s conference (subject to change) include Theology of Work, Social Entrepreneurship, Rise and Fall of the European Social Market, Fertility’s Impact on the World Economy, and Islam, Markets and the Free Society. (A full course listing can be seen here.)

If you’re new to Acton, or would like to share the Acton University experience with someone, please enjoy Acton Institute Presents: Acton University.