How do potatoes from Idaho end up in supermarkets in New York City? As economist Walter Williams explains, its because of the power of the profit motive.
I had the privilege of giving the opening lecture last night for the “Limited Government and the Rule of Law” conference taking place here in Grand Rapids this weekend. The talk was on “Christian Origins of Limited Government,” and was followed by an excellent Q&A session.
One of the questions had to do with economic consequences or effects of the Fall into sin, particularly with respect to the curse. There are of course myriad implications for economics from the curse, starting first with the recognition of the toilsome nature of labor in the fallen world:
“Cursed is the ground because of you;
through painful toil you will eat food from it
all the days of your life.
18 It will produce thorns and thistles for you,
and you will eat the plants of the field.
19 By the sweat of your brow
you will eat your food
until you return to the ground,
since from it you were taken;
for dust you are
and to dust you will return.”
Presumably this means that human work isn’t as productive as it would be otherwise. One practical effect of this is scarcity. Fallen work doesn’t produce as many goods and services as non-fallen work; and it would seem there are in fact both qualitative and quantitative consequences for the fruits of human labor. The noetic effects of sin would have some implications here, as well, as it may be that Adam’s insights into the nature of the world were adversely effected. Where he had previously known the nature of things by immediate perception, this insight may well have been clouded. Certainly, as Abraham Kuyper notes, we no longer possess that direct insight that Adam had before the Fall.
So if we understand economics to be, at least from one perspective, reflection on the dynamic between limited resources and unlimited needs, wants, or desires (as Victor Claar described it in his talk on envy earlier this week), then we have clear implications for economics on the scarcity side stemming from the curse.
But I would also argue that the curse has impacted the other half of the dynamic as well. Our desires have become disordered, inordinate, and confused. We want the things we shouldn’t, and we want the things we should want more than we should want them. The acquisitive, grasping, desiring side of human nature is unmoored from and detached from its natural human limits and orientation. We see evidence of this disorder in the aspect of the curse that is applied to the wife: “Your desire will be for your husband, / and he will rule over you.”
So if the curse was the introduction of scarcity into human life, it also was the introduction of desires no longer appropriately limited by obedience to God’s will. Economics in this fallen world deals directly with these (and other) consequences of the curse.
Dismal science, indeed!
Here are some events worth noting next week:
On Wednesday, April 11, Victor Claar will join us for an Acton on Tap. Victor Claar is a professor of economics at Henderson State University in Arkansas, and previously taught for a number of years at Hope College. I’ll be introducing Victor and the topic for the evening, “Envy: Socialism’s Deadly Sin.” We’ll begin to mingle at 6pm, and the talk will commence at 6:30, followed by what’s sure to be some lively discussion. Join us at Derby Station, and if you’re on Facebook, check out the event page, where some enjoyable dialogue has already commenced.
That same evening George Weigel is visiting Grand Rapids to lecture as part of the Catholic Studies Speaker Series at Aquinas College. Weigel is a prolific author, perhaps best known for his magisterial biography of Pope John Paul II, and holds the William E. Simon Chair in Catholic Studies at Ethics and Public Policy Center in Washington, DC. At 7pm at the Wege Ballroom, Weigel will speak on the topic, “John Paul II, Ex Corde Ecclesiae, and the Future of Catholic Higher Education.” Check out the event and Catholic Studies at Aquinas College on Facebook.
The following morning, Thursday, April 12, at 8am Victor Claar will be headlining a breakfast at Kuyper College. Kuyper has recently introduced a business leadership major, and this breakfast is the latest event held to promote development among the students, faculty, staff, and broader community around the vitally important challenges of faithful engagement of business and economic aspects of life. Claar is the co-author of Economics in Christian Perspective, and will draw on this well-regarded text as he provides principles for understanding the relationship between Christian faith and commercial activity. There is some limited seating available for this breakfast, so check out the details at Kuyper’s website for more information on reserving a spot.
I’ll also be attending the 21st annual Wheaton Theology Conference, which this year focuses on the theme, “Bonhoeffer, Christ, and Culture.” One of my many projects at present is a dissertation (my second!) on Bonhoeffer’s ethics, and so I’m looking forward to this event, which runs Thursday and Friday next week and is at Wheaton College in Wheaton, Illinois.
A week ago, Dr. Samuel Gregg addressed an audience here at Acton’s Grand Rapids, Michigan office on the topic of “Europe: A Continent in Economic and Cultural Crisis.” If you weren’t able to attend, we’re pleased to present the video of Dr. Gregg’s presentation below.
This issue of the journal (14.2) is actually a theme issue on Modern Christian Social Thought. Accordingly, all ten articles engage the history and substance of various approaches to Modern Christian Social Thought, with special emphasis on the Reformed and Roman Catholic traditions.
There is also another installment of our Controversy section, featuring a three-way debate over the question, “Does Libertarianism Tempt Some Catholics to Stray from Catholic Social Thought?”
As always we have another thorough collection of first-rate book reviews from top scholars and experts in the fields of theology, ethics, and economics.
Lastly, our Status Quaestionis section includes two works from the nineteenth century which have never before been translated into English: “Critical Analysis of the First Concepts of Social Economy” (1857) by Luigi Taparelli, SJ and “Christ and the Needy” (1895) by Dutch theologian and statesman Abraham Kuyper. All in all, it may possibly be our largest issue yet.
How much is a homemaker worth? Financial service company Investopedia recently added up what it would cost to hire someone to do cooking, cleaning, child care, driving, laundry, and lawn service equivalent to a full-time homemaker. The equivalent compensation would total $96,261.
Studies like this one are perennial, as Greg Forster notes, and have been around since at least the 1950s. But while the intentions are well-meaning, such studies have a tendency to reinforce materialistic assumptions about the nature of human relationships in both the family and the economy:
Over at National Review Online, Acton Research Director Samuel Gregg takes a look at a recent Charles Blow op-ed in the New York Times in which the writer hyperventilates about statements made by Rick Santorum on the subject of income inequality.
Economically speaking, income inequality reflects the workings of several factors, many of which are essential if we want a dynamic, growing economy. Even your average neo-Keynesian economist will acknowledge that, without incentives (such as the prospect of a higher income), many entrepreneurial projects that create wealth — not to mention jobs and often greater incomes for others — may lie dormant forever. Either that or the entrepreneur will simply leave for a more friendly economic environment in which his ideas, willingness to assume risk, and potential job-creation capacities are taken more seriously.
Part of Mr. Blow’s unhappiness with Santorum was that he made his inequality remarks in Detroit, despite Blow correctly noting that “income inequality in the Detroit area isn’t particularly high.”
But Detroit’s well-documented economic problems have little to do with income inequality per se. They have far more to do with decades of corporatist collusion between bailed-out car companies and the UAW, rampant political corruption, and assorted crony-capitalist arrangements — the same arrangements that recently helped, as a recent University of Illinois study illustrated, the Chicago metropolitan region merit (yes, merit) the unenviable title of “the most corrupt area in the country since 1976.”
Read “Inequality Anyone?” by Samuel Gregg on National Review Online.
In this week’s Acton Commentary, “Corrupted Capitalism and the Housing Crisis,” I contend we need to add some categories to our thinking about political economy. In this case, the idea of “corporatism” helps understand a good deal of what we see in the American system today. Adding corporatism to our quiver helps us to make some more nuanced distinctions than simple “socialism” and “capitalism” allow.
Take, for instance, Mitt Romney’s contention this week while campaigning in Michigan that the bailouts of the auto companies was a feature of “crony capitalism.” A better way to understand the relationship between big business and big government today might instead be characterized as “crony corporatism.” You have a select group at the highest levels of an industry influencing government policy, which in turn favors those big businesses, provides various moral and fiscal incentives to consumers to patronize these industries, and then when necessary bails them out.
In this week’s commentary I use corporatism as a way of unpacking what happened in the recent housing crisis. For too long the American dream has revolved around home ownership. Owning a home is a good thing for many people; for many others it isn’t. What we have failed to recognize is the moral hazard that attends to government promotion of a particular vision of the American dream and the crises that result. As Dambisa Moyo characterized the housing crisis,
The direct consequence of the subsidized homeownership culture was the emergence of a society of leverage, one where citizen and country were mortgaged up to the hilt; promoting a way of life where people grew comfortable with the idea of living beyond one’s means.
The definition of the American dream offered by politicians should be far less precise, and presumably not include the level of specificity that says we should all own a home, drive a GM car, and have a college degree. As Nobel laureate Edmund Phelps put it in a 2009 interview,
I’m hoping that the administration and other thought leaders will succeed eventually in bringing the country back to the older idea that the American dream is having a career, getting a job, and getting involved in it, and doing well. That was the core of the good life. That’s what we have to get back to, and get away from this mystique that the most important thing in your life that could ever happen to you is to be a home owner.
The cultivation of an “ownership society” through government subsidy is only one feature of the creeping corporatism of contemporary America. As has been documented just in the last few days, the role of the government in directing and providing social goods has increased dramatically over recent decades. Following a New York Times story describing the increasing dependence of the American middle class on governmental initiatives of one form or another, Steve Hayward summarizes, “increasingly we’re taxing the middle class to pay themselves their own money, minus a large commission to Washington DC” (HT: The Transom). The government is increasingly using these subsidies and incentives to shape how people live their lives.
As I conclude in today’s piece, “The American people do not need politicians to tell them what happiness is and how it should be pursued. These are functions that our families, churches, and friendships fulfill.” One place to look instead would be the Westminster Shorter Catechism: “Man’s chief end is to enjoy God and glorify him forever.” Another would be the words of Jesus: “Life does not consist in an abundance of possessions” (Luke 12:15).
Methodism was once the largest denomination in America. The faith grew rapidly from America’s beginning and has traditionally been characterized by aggressive evangelism and revival. It has carried a vibrant social witness, too. Methodist Church pronouncements once garnered front page headlines in The New York Times. Its high water mark undoubtedly came during prohibition, the greatest modern political cause of the denomination. Methodists even built and staffed a lobbying building next to Capitol Hill believing a dry country could remake society.
In Methodism and Politics in the 20th Century, Mark Tooley has chronicled Methodism’s denominational political pronouncements from William McKinley, America’s first Methodist president, to 9-11. Tooley has unearthed a staggering amount of official and unofficial Methodist declarations and musings on everything from economics, war, civil rights, the Cold War, abortion, marriage, and politics.
Tooley, who is also the author of Taking Back the United Methodist Church, offers very little of his own commentary on the issues in Methodism and Politics, instead allowing Methodism’s voice for over a century to speak for itself. Ultimately what emerges is a denomination that begins to recede in significance, perhaps because of the sheer saturation of their witness in the public square. But its leadership often trades in a prophetic voice for a partisan political one, and sadly at times, even a treasonous voice.
Methodists not only led on prohibition, but were out in front on issues like women’s suffrage, the New Deal, and the Civil Rights Movement. While they did not always carry a unified voice on these issues, even many Southern annual conferences and bishops broke with the popular political position of defending segregation in their home states.
While support for the New Deal and greater federal intervention in the economy was not rubber stamped by all Methodists, an emerging and often biting anti-free market voice would dominate official pronouncements. This continues to this day with declarations calling to support greater government regulations, single payer health care, and a host of measures calling for government wage and price controls. Way back in 1936, one Oklahoma Methodist pastor offered his own advice to some of his brethren:
Why do [these Methodist Reds] not get passports, emigrate to Russia where they can prostrate themselves daily before the sacred mummy of Lenin and submit themselves to the commands of Joseph Stalin?
Tooley chronicles the pacifist sentiment that begins to overtake the denomination. This amounted to the equivocating of a denomination that once was harsh in its critique of communism to one where a committee of bishops would pronounce by the 1980s, that “actions which are seen as ‘Marxist-Leninist’ by one group are seen as the core of the Christian message by others.”
Perhaps most shameful was the action of several bishops during the American hostage crisis in Tehran, Iran, from 1979 – 1981. United Methodist Bishop Dale White said of the new Islamic fundamentalist regime, “I know there are individuals in the Iranian power structure who do trust The United Methodist Church.” White offered assessments of the new regime being “democratic.” The General conference sent a message to Ayatollah Khomeni declaring that it hears the “cries of freedom from foreign domination, from cultural imperialism, from economic exploitation.” Methodist officials participated in pro-Khomeni student demonstrations in Washington D.C. and met with and offered praise for officials in the new Iranian government. One former hostage recalled:
Some of the people who came over especially the clergy were hypocrites because they came to aid and comfort the hostages but ended up giving aid and comfort to the Iranians and actually making it worse for us.
The election of President Ronald Reagan naturally sent many United Methodist Church officials into a tizzy. “People voted their self interest instead of the Social Principles of the church. It looks like United Methodists with everybody else forsook their Christian idealism at the ballot box,” said Bishop James Armstrong. Some United Methodist Bishops had already declared their denomination much more aligned with the Democratic Party. It was downhill from there for many Methodist leaders, as they coddled the Sandanistas and “Brother Ortega” in Nicaragua and dove head first into the nuclear freeze movement.
In the 1990s one General Board of Global Ministry official bewailed the Republican Congress by saying, “White, male supremacists now wear suits. They talk states rights and anti-taxes. The climate of hate and violence is a challenge to us.” General Board of Church and Society official Robert McLean declared that the GOP Contract with America effectively “cancels” the Sermon on the Mount.
Hyperventilating over partisan politics would continue in The United Methodist Church and continues to this day by American officials. Most recently many have joined forces with the “What Would Jesus Cut Campaign?” But because Methodism is a connectional denomination, the growing African influence is counter balancing what Methodist progressives and political liberals can accomplish. They have already reached the pinnacle of their power, which has been shrinking for decades. And because progressives have made so many predictable pronouncements, they no longer speak with the weighty spiritual authority they once held. It is a lesson for all churches and those that wish to bring their faith into the public square. At the 1934 Illinois Annual Conference one lay delegate offered what can be seen only as prophetic now when he declared, “It is time for churches to stop adopting resolutions and then finding out what they mean afterward.”
Just a few weeks ago, The United Methodist Church’s General Board of Church & Society heaped praise on President Obama’s HHS mandate with no mention of the measure’s threat to religious liberty, deciding to only view it as a partisan measure to defend for furthering the role of government in health care.
At the conclusion of the book, after reading through 100 years of political pronouncements, Tooley finally offers just a hint of his own assessment,
American Methodism in 1900 was growing, confident, largely unified, and politically formidable. One hundred years later, it had already endured several decades of steep membership decline and accompanying political marginalization as church officials were no longer presumed to speak for most church members.
Tooley, through the myriad of voices that he has chronicled over such a lengthy period, understands those voices only need to speak for themselves to make his point.
In the 1920s Calvin Coolidge once said of Francis Asbury, one of the first two Methodist Bishops in early America, that “he did not come [to America] for political motives,” but came to bear “the testimony of truth.” One wishes Methodist denominational officials would not only follow more of Asbury’s doctrine, but his praxis as well.
Over at National Review Online, Acton Research Director Samuel Gregg recaps President Obama’s State of the Union address:
There is always something surreal about a Chicago politician talking about “fairness” and “playing by the rules.” There is something even more bizarre about a president talking about the need to expand energy production after his administration has generally undermined significant progress in facilitating energy development for three years in the middle of a recession. And who would describe Detroit as “on the way back”? A stroll down the ghost town otherwise known as downtown Detroit — which is teetering on the edge of being put into administration — would suggest the opposite. It’s not often that I agree with very much said by the New York Times’s Maureen Dowd, but this State of the Union speech illustrated that the lady was dead right in describing the Obama presidency as a bubble within a bubble.
Read it all on NRO.