Posts tagged with: economics

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.

Matthew Tuininga, at Christian in America, attended Acton University last week, and came away with a number of insights regarding government, religion and economics. Chief among his insights is this:

Christians should not argue for a free market or capitalist society because Scripture or the Church has given us such a system. Rather, the moral case for a free market and for capitalism depends to a significant degree on the fact that it works. Principle, in that sense, is inseparable from pragmatism. If you want to help the poor, why would you support any system other than that which has done more to create economic growth and has lifted more people out of poverty than any other institution or force in the history of the world? If you value freedom, why not maximize it as much as is possible consistent with general prosperity, peace, and order?

As Tuininga points out, we can easily make our case for free market economics from a moral standpoint,  using logic and sound scholarship to persuade people who may believe that only religion (especially Christianity) makes the case for free market economics.

Read more of Tuininga’s post here.

I just read the introduction to Amity Shlaes’s forthcoming biography, Coolidge: Debt, Perseverance and the American Ideal. She has been very gracious in taking an interest in the work I have been doing on Coolidge and my recent Acton commentary on the 30th president.

Shlaes was interviewed in the Fall 2007 issue of Religion & Liberty about her book The Forgotten Man. I quickly realized in my own research there is no biography that captures Coolidge’s deep relevancy for today given the mammoth federal debt and the centralization of federal power. Coolidge took limiting federal power and its reach seriously.

Without naming names or titles, many of the Coolidge biographies in print are simply sub par. That will change with the release of her biography and this is a book that needs to be out now. There is no release date set in stone to my knowledge or I would offer it up to readers of the PowerBlog.

In the introduction, it is clear just how well Shlaes understands Coolidge’s leadership on economic issues and his emphasis on thrift. I love that she played off her title The Forgotten Man by calling Coolidge “The Forgotten President.” I’ve certainly noticed in my own talks when I go out and discuss Coolidge that so little is known about him.

In her introduction, Shlaes brilliantly draws out comparisons of Coolidge with George Washington, John Adams, Abraham Lincoln, Grover Cleveland, Theodore Roosevelt, Woodrow Wilson, Warren G. Harding, John F. kennedy, Lyndon Johnson, and Ronald Reagan. Some of her insightful comparisons I would never have highlighted on my own. Shlaes is a gifted writer and I foresee this book being very influential with the ability to transform contemporary thinking about our national government.

One of the things that draws me to Coolidge is his appreciation for the past. He was a very modern president who oversaw great technological advances and an America that was modernizing at a rapid pace but he always reminded the people of who they were and the great heritage that gave birth to the American ideal. “If we are to maintain the great heritage which has been bequeathed to us, we must be like-minded as the fathers who created it,” declared Coolidge.

One of my favorite books is The Word of Life by Thomas C. Oden. In the introduction to that book Oden quotes Henry Vaughan’s “Retreat:”

O How I long to travel back,
and tread against that ancient track! . . .
Some men a forward motion love,
But I by backward steps would move.

If Coolidge had heard those words, which is quite possible, I feel he would have loved them.

On the Patheos Evangelical channel, Joseph E. Gorra talks to 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 frames the interview with this question: “Countless detractors over the years have argued that capitalism is intrinsically immoral. Is it true?”

Patheos: As you know, “capitalism” and “free markets” often invoke all sorts of various (even contradictory) images and ideas for different people. I want to start by having you articulate what it is that you are defending in this book in order to help readers break through some of the “noise” that’s out there on this topic.

Sirico: The word “capitalism” itself has Marxist connotations and is, to my mind, too narrow for the free economy I am talking about. Every sort of state or crony capitalist venture gets to use the name capitalism, and I am as suspicious of corporate welfare as I am for other kinds of welfare—and for many of the same reasons.

Patheos: What would be a better way to nuance “capitalism”?

Sirico: I really find helpful Blessed John Paul II’s delineation between what might be called “capitalisms” in his 1991 encyclical Centesimus Annus where he says that the kind of “capitalism” which should replace the collapsed Communist regimes in Central and Eastern Europe and recommended to the developing world ought to be one “which recognizes the fundamental and positive role of business, the market, private property, and the resulting responsibility for the means of production, as well as free human creativity in the economic sector…” but then he is quick to add, “even though it would perhaps be more appropriate to speak of a “business economy,” “market economy,” or simply “free economy” (see Centesimus Annus, no. 42). Such an expression of human liberty, grounded in ethical and religious tradition—especially natural law reasoning—and circumscribed by law, is to my mind, the best we can get on earth. This approach is neither libertine nor anarchistic.

Read “Is Capitalism Immoral? An Interview with Father Robert Sirico” on the Patheos Evangelical channel.

Acton Institute president and co-founder Rev. Robert Sirico’s Research on Religion podcast went live today. In it, Rev. Sirico sits down with host Tony Gill to discuss his new book, Defending the Free Market: The Moral Case for Capitalism, and a range of other topics, including the morality of capitalism, faith-based initiatives, and Austrian economics. The podcast is available to listen to or download online and regularly offers fresh perspective on relevant topics. Today’s is no exception. Check it out.

On his Koinonia blog, Rev. Gregory Jensen reviews Rev. Robert Sirico’s new book, Defending the Free Market: The Moral Case for a Free Economy.

Jensen:

“Daring though the argument is, especially for a Catholic priest, it is also essential that it be made since for too many people (including business people), free market economic theory and policies are little more than a justification for greed. While not denying the excesses of capitalism and real sins of capitalists, Fr Sirico wisely doesn’t allow sin to have the last word. Rather, and like St Augustine who inspired his own spiritual journey, the helps us see the goodness hidden beneath the distorting effects of moral failure.

Though irenic in tone, Sirico is unwilling to cede ground to those who imagine—wrongly in his view—that “socialism, liberalism, collectivism, and central planning” (p. 185) are morally superior and more effective in generating wealth. They aren’t and however noble the intention they are come up morally and practically short because they neither anthropological sound nor effective in caring for the material needs of the human person. The latter is especially the case when we turn to the needs of the most vulnerable among us. It is the free market that best fits the truth of the human person. And it is only the free market that has demonstrated the ability not only to lift the human person out of the poverty that was the almost universal lot of humanity even as late as 200 years ago.”

Read “More than Mere Economics” here.

The deadline to register for the 2012 Acton University conference is this Friday, May 18! This means that you have less than five days to visit university.acton.org to finish that application you started a few days ago.

If I were going to try to explain Acton University, I could say that attendees and faculty alike are professionals who are among the best in their respective fields. I could also say that the number and variety of resources brought to the event by everyone involved, whether directly or indirectly, is simply astounding. Or, I could explain that both of these elements help us to create an environment that cultivates your ability to articulate your understanding of the Judeo-Christian view of liberty and morality and its application in a free and virtuous society. Try as I might, though, none of this accurately describes the experience you’ll have at Acton University this summer. But remember: You only have until Friday to register so that you can find out for yourself!

David Clayton, permanent artist-in-residence at Thomas More College of Liberal Arts, has written an appealing piece at The Way of Beauty, that connects the seemingly unlikely arenas of liturgy and economics. His thoughts are based on The Wellspring of Worship, by Jean Corbon, in which Corbon associates work and culture to the human experience of worship and liturgy.

Clayton admits that linking liturgy and economics may be a stretch, but upon further examination shows that, with a proper understanding of the human person, the relationships we have and bring to both our worship and our work lives are intrinsically united. Our culture suffers a sense of distance and alienation, according to Clayton, that springs from lack of liturgy, then spreads into our economics:

…the sense of alienation of the person from society through variously too much work, the lack of it, or the wrong sort; the lack of genuine community in work that supports the family, and a culture bereft of grace and beauty with art that doesn’t look like art at all, music that doesn’t sound like music, ugly mass-produced goods and ugly houses, factories, civic buildings and churches. Many who have this view blame in varying degrees causes such as capitalism, the unfettered free market, mass production, industrialisation to name four.

I share this concern about the culture and the nature of work today, not as an economist about which I know very little, but just as someone who is part of society and works. However, like Corbon, I feel that the problem to be solved is liturgical…

Clayton then reminds the reader of the importance of anthropology:

My belief is that if we adopt a model of economics that is rooted in a liturgical view of the anthropology, then we can transform the industry and the economy into power houses for culture of beauty. It will never be perfect, but it can be a lot better.

While the author is an artist and not an economist, his ability to identify harmony and beauty in the world allows him to see the relevance that  harmony brings to our economic transactions and affairs. To be human is to be in relationship: with God and each other. That begins in our liturgical practices and permeates  society, and our day-to-day economic affairs, our work and our culture.

Read more….

Is ‘fair trade’ more fair or more just than free trade? While free trade has been increasingly maligned, The Fair Trade movement has become increasingly popular over the last several years. Many see this movement as a way to help people in the developing world and as a more just alternative to free trade. On the other hand, others argue that fair trade creates an unfair advantage that tends to harm the poor.
(more…)