Posts tagged with: economics

Continuing our recap of last year’s Acton Lecture Series in anticipation of Thursday’s opening lecture of the 2011 ALS (which you can register for right here), we’re pleased to present the video from February and March of 2010.

On February 18, 2010, Acton’s Director of Media Michael Miller Delivered a lecture entitled “Does Capitalism Destroy Culture?” His lecture discussed the positive and negative impact of capitalism in society today. Miller pointed out that it’s not just Christians that are worried about culture and that it is just not a right or left issue. Many are also worried about rampant consumerism and the perceived danger of technology. Miller also addressed the Southern Agrarians and their conservative critique of industrialization. Video is below:

A month later on March 18, we welcomed Rudy Carrasco to our podium to deliver a lecture entitled “Do the Poor Need Capitalism?” A 2009 paper from the National Bureau of Economic Research says that the number of people in the world living on less than $1 per day fell from 403 million in 1970 to 152 million in 2006. An analysis from the American Enterprise Institute says the biggest factor was the rise of the middle class in China and India, at a time when the world’s population grew by 3 billion. Carrasco discussed whether capitalism is a greater asset than liability in the fight against poverty, and whether capitalism must be moderated by virtue and morality before a Christian can embrace it. Again, the video is below:

In yesterday’s edition of the Grand Rapids Press, editorial page editor Ed Golder reflects on the implications of the historically-high levels of government spending, the deficit, and debt.

Most impressively, Golder notes where the government is actually spending money, and it is largely not in the areas of discretionary spending that so many politicians like to talk about. Golder writes,

Neither party is forthrightly honest about what needs to be done. Making the necessary cuts touches on very large and politically sacrosanct programs. About one fifth of federal spending, for instance, is defense. Can we seriously tackle the budget without looking at some prized weapons programs?

And the biggest category of spending, the one growing at the fastest rate, is entitlements – Medicare, Medicaid, Social Security and health insurance for children.

We may have to accept the idea that rich people will pay more than poorer people for medical coverage. We will almost certainly, given life expectancies, have to work longer before receiving Social Security benefits.

Reform of defense spending is important. But the real key is entitlement reform. I’ve often thought that one lasting legacy of the Bush era (beyond the wars and the Great Recession) is found in his insistence on bringing to the national discussion the issue of entitlement reform, particularly Social Security. He wasn’t successful, but it did show some principled political courage to make Social Security reform a major policy goal of his administration.

Golder also relates this entertaining little anecdote:

Speaking to the Economic Club of Grand Rapids Monday, financial forecaster Jason Trennert, was asked by an audience member to handicap Washington’s ability to make meaningful headway in tackling the debt. He wryly quoted theologian Augustine of Hippo, who famously quipped, “Lord make me chaste, but not yet.”

In other words: Sure, we’ll reform. Tomorrow.

Tomorrow’s here. Heck, tomorrow may be yesterday at this point.

That’s one other legacy of the Bush era that we are living with, the legacy of the mantra, “Lord, make me thrifty, but not yet.” That goes for the politician as well as for the citizen.

Golder rightly concludes by pointing to the need for leadership on these pressing fiscal issues. We’ve gotten to this place largely because of a lack of political leadership. “Our leaders have to talk frankly about what needs to be done – programs that will be cut, individual sacrifices that will have to be made,” writes Golder.

Instead of statesmen we’ve been electing those who could bring home the most pork for their districts and constituencies, damn the consequences. That needs to change, and it begins in the renewal of leadership in other spheres of social life, including the family, business, charity, education, and so on.

An interesting report in The Economist on the rise of flashy and free spending entrepreneur “gazillionaires” in India and China and how they are perceived:

In much of India, life is getting perceptibly better each year. Wealth per person has vaulted by 150% in the past decade, from $2,000 to $5,000. Many Indians think the nation’s entrepreneurs deserve some of the credit. In Dharavi, a slum outside Mumbai, an illiterate mother called Aruna sits in her tiny one-room flat, which is home to ten people. Asked how she feels about the rich, she says: “They have worked hard. And we must work hard, too.” Her eldest daughter has a job entering data at a bank. The next one is studying diligently. The family may be near the bottom of the ladder, but it sees a way up.

But this in China:

The perception that commercial success often depends on political ties makes inequality in China more galling. In the mid-1980s Chinese incomes were more evenly distributed than India’s—hardly surprising, since China was nominally communist and India is afflicted by a caste system. But now China is less equal than India, with a Gini coefficient of 0.4 to India’s 0.37. China has 800,000 dollar millionaires, but also 400m people who live on less than $2 a day.

Blog author: jcouretas
posted by on Thursday, December 16, 2010

In “Human Nature and Capitalism” on AEI’s The American, Arthur C. Brooks and Peter Wehner look at three different “pictures” of what it means to be human and point to the one, foundational understanding that has undergirded the flourishing American culture of democratic capitalism:

“If men were angels,” wrote James Madison, the father of the Constitution, in Federalist Paper No. 51, “no government would be necessary.” But Madison and the other founders knew men were not angels and would never become angels. They believed instead that human nature was mixed, a combination of virtue and vice, nobility and corruption. People were swayed by both reason and passion, capable of self-government but not to be trusted with absolute power. The founders’ assumption was that within every human heart, let alone among different individuals, are competing and sometimes contradictory moral impulses and currents.

This last view of human nature is consistent with and reflective of Christian teaching. The Scriptures teach that we are both made in the image of God and fallen creatures; in the words of Saint Paul, we can be “instruments of wickedness” as well as “instruments of righteousness.” Human beings are capable of acts of squalor and acts of nobility; we can pursue vice and we can pursue virtue.

And they draw a parallel to institutions of government where democracy, with all of its flaws, also works itself out to be the most fitting form of government under this model of human nature. When I engage with critics of the market economy, I use the following Churchill quote but substitute “market economy” for “democracy.” Valid, I think, because we have some disastrous experience with political systems that do not operate in concert with a more or less open market.

Many forms of Government have been tried and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time. — Winston Churchill (House of Commons, Nov. 11, 1947)

Brooks and Wehner:

… our “picture of human nature” determines, in large measure, the institutions we design. For example, the architects of our government carefully studied history and every conceivable political arrangement that had been devised up to their time. In the course of their analysis, they made fundamental judgments about human nature and designed a constitutional form of government with it in mind.

What is true for creating political institutions is also true for economic ones. They, too, proceed from understanding human behavior.

It is hard to overstate the importance of this matter. The model of human nature one embraces will guide and shape everything else, from the economic system one embraces (free-market capitalism versus socialism) to the political system one supports (democracy versus the “dictatorship of the proletariat”). Like a ship about to begin a long voyage, a navigational mistake at the outset can lead a crew to go badly astray, shipwreck, and run aground. To use another metaphor, this time from the world of medicine: A physician cannot treat an illness before diagnosing it correctly; diagnosing incorrectly can make things far worse than they might otherwise be.

Those who champion capitalism embrace a truth we see played out in almost every life on almost any given day: If you link reward to effort, you will get more effort. If you create incentives for a particular kind of behavior, you will see more of that behavior.

A free market can also better our moral condition—not dramatically and not always, but often enough. It places a premium on thrift, savings, and investment. And capitalism, when functioning properly, penalizes certain kinds of behavior—bribery, corruption, and lawlessness among them—because citizens in a free-market society have a huge stake in discouraging such behavior, which is a poison-tipped dagger aimed straight at the heart of prosperity.

Read the full article on The American.

Blog author: jballor
posted by on Friday, November 19, 2010

Today is my last day at the Evangelical Theological Society (ETS) meeting in Atlanta. I plan to make my purchases from the various book sellers this morning, having already reconnoitered the exhibits and mapped out my plan of attack.

One thing that has struck me is that there are a number of new books discussing ecumenism and Christian unity from host of different perspectives. On the one hand this shouldn’t be surprising. The unity of the church is a constant theme, one that is confessed in the Nicene Creed (“We believe…in one holy catholic and apostolic Church.”).

But for a period of time it seemed that ecumenism was in decline. After all, it used to be its own area of theological specialization; there have been (and still are some) professors of ecumenics. On the broader level one thing that breathed life into the ecumenical movement in the last half-century was the founding of what is now known as the Pontifical Council for Promoting Christian Unity (I had the pleasure of meeting the pope’s representative, Fr. Gregory Fairbanks, at the WCRC Uniting General Council earlier this year in Grand Rapids).

An ENI story notes a recent address from Pope Benedict XVI regarding ecumenism: “Today, some people believe that this journey has lost its impetus, especially in the West,” the Vatican Information Service quoted Pope Benedict XVI as saying. “Thus do we see the urgent need to revive ecumenical interest and give a fresh incisiveness to dialogue.”

Now this story is in the context of Roman Catholic, Orthodox, and Anglican dialogue. But “new energy” needs to be found in the mainline ecumenical movement as well. I outline some of the reasons for the decline of groups like the WCC, LWF, and WCRC in my book, Ecumenical Babel. And as the Vatican celebrates fifty years of institutional ecumenical efforts, we have seen a corresponding decline in vigor in the mainline Protestant groups. Some evidence of this is the consistent outreach and emphasis on engaging “evangelicals” from the WCC, whose new president expressed such sentiments at both the WCRC Uniting General Council and the recently concluded Cape Town 2010 meeting of the Lausanne Movement.

So says Mark Tooley of IRD. “Sadly, over the last 50 years, it (the ecumenical movement) has faded into the sidelines and is now largely ignored,” he said. In the 1980s Ernest Lefever, founder of the Ethics and Public Policy Center, observed that “the ecumenical movement’s social witness has become obsolescent, marginal, irrelevant, or worse.”

I outline some of the things needed to reinvigorate the mainline ecumenical movement in my book. I outline correctives on three main levels: the ecclesiastical, the social ethical, and the economic. But I conclude too that

Without pursuing correctives along these general lines, the answer to Gustafson’s challenging question, “Who listens to the moral teachings of Protestant churches?” will continue to be indeterminate, and deservedly so. Without doing the hard work of serious ethical deliberation that engages a variety of conflicting perspectives, the ecumenical movement has little claim to possess authentic moral authority in the public square or among the churches.

After the break you can read the full ENI story on the fiftieth anniversary of the Vatican secretariat (now council) for promoting Christian unity. (more…)

I just sent off a draft of a brief review of Carl Trueman‘s new book Republocrat: Confessions of a Liberal Conservative to appear in the next issue of Religion & Liberty. (You can get a complimentary subscription here).

I recommend the book as a very incisive and insightful challenge to any facile and uncritical identification of the Christian faith with particular political and economic ideologies.

Here’s a snippet of the review:

[Trueman's] project is not about demonizing capitalism, wealth, or profits one the one hand, or political power on the other. It is about putting the pursuit of profit and power in its proper place. Thus what he writes about the market applies equally well to the government: “no economic system, least of all perhaps capitalism, can long survive without some kind of larger moral underpinning that stands prior to and independent of the kinds of values the market itself generates.” It is in this larger and prior system of belief and action, the Christian faith, that we are to seek our primary identity and unity, and in pursuit of this Trueman’s book is a bracing and worthwhile effort.

I have been saying in various venues for quite some time now that Trueman’s book can be read as a kind of complement to my recent book, Ecumenical Babel: Confusing Economic Ideology and the Church’s Social Witness. But whereas Trueman’s proximate context is the conflation of conservative politics and the Christian faith by evangelicals, my book’s context is the conflation of progressive politics and the Christian faith by mainline ecumenists.

But both books share a basic thesis that, in Trueman’s words, “The gospel cannot and must not be identified with partisan political posturing.”

Blog author: jballor
posted by on Tuesday, November 2, 2010

The title of this post borrows from a phrase I employ in the conclusion of tomorrow’s Acton Commentary on the prospects for austerity in America after today’s mid-term elections. (I can’t claim to have coined the term, since about 4,270 other instances of the phrase show up in a Google search, but I like it nonetheless.)

Today I’ll simply highlight a few of the relevant stories that I’ve noted on this theme over recent weeks and months.

As Samuelson notes, austerity is by its very nature unpopular. Speaking of the dilemma facing governments, he writes, “Without unpopular spending cuts and tax increases, unmanageable deficits may choke their economies.”

Tomorrow I’ll discuss the treatment of austerity as a leitmotif in the writings of Paul Krugman, who most recently dubbed austerity proponents “moralizers.” The significance of this will be made more clear tomorrow in relation to my commentary, “‘A’ for Austerity: The New Scarlet Letter.”

Blog author: jcouretas
posted by on Friday, October 29, 2010

As America and Europe continue to wrestle with the question of how best to address their respective economic crises, many are looking back to the lessons of history and how they might be applicable to today. Scholars, public intellectuals, and policy analysts are paying particular attention to the economic debates of the 1930s, during which much intellectual wrestling — not all of it pretty — occurred over the causes of the Great Depression and how to best alleviate its destructive effects. Not surprisingly, the writings of John Maynard Keynes and Friedrich von Hayek are among the most heavily referenced by contemporary figures.

Another scholar who wrote extensively on the causes of, and possible solutions to, protected recessions was the German economist Wilhelm Röpke. His thinking was shaped not only by his lengthy formal studies of business cycles, but also the fact that he was extensively consulted by German governments in the late 1920s and early 1930s as the Weimar Republic struggled to stave off political and economic disaster amidst the collapse of banks and skyrocketing unemployment that fed the extremes of left and right. These consultations came to an end in 1933 after the fiercely anti-Nazi (and anti-Communist) Röpke became of the first academics to be purged from the universities by the new National Socialist government.

In his 2010 book, Wilhelm Röpke’s Political Economy (described by one reviewer in Economic Affairs as “the most comprehensive in its analysis of this important thinker’s political economy” and another reviewer in The American Spectator as “mandatory reading for every student of political economy”) Acton’s Research Director Samuel Gregg included an analysis of Röpke’s thinking about business cycles and recessions as the world remained stuck in an economic quagmire throughout the 1930s. Gregg compares Röpke’s position to that of Hayek and Keynes, illustrating how Röpke moved ever closer to Hayek’s analysis and prescriptions and ever more skeptical (and outspokenly so) of Keynes’s views.

Those interested in this subject, but who also wonder what Röpke might have thought of our current economic predicaments might be interested in an address delivered by Dr. Gregg in Buenos Aires, Argentina, in March 2010. The English-language lecture—“Wilhelm Röpke, The Depression and the 2008 Crisis: Reflections from the Past, Lessons for Today”—has just been published in the May 2010 edition of the Argentine journal Revista de Instituciones, Ideas y Mercados, the flagship journal of ESEADE, one of Argentina’s leading market-oriented universities.

It’s especially interesting to observe that while Röpke was initially willing to contemplate some mild interventions (mainly of the type that removed obstacles to a market-driven recovery), Gregg shows that Röpke soon concluded that most interventionist programs were counterproductive and/or ineffectual. Here Röpke was especially influenced by what he regarded as the failure of the New Deal (a failure beautifully documented by the economic historian Amity Shlaes in her 2008 book, The Forgotten Man) to reignite the American economy. As Röpke wrote in 1942:

It turned out that the original calculation that the Government’s boost of purchasing power would set off the private investment drive that was due, was wrong. Every time the Government’s injections were withheld, it was as if there was no private initiative which could take the place of public initiative.

Sound familiar? In his lecture, Gregg notes:

Most interwar active business-cycle policies aimed at combating the Depression, Röpke argued, had failed . . . . Instead [citing Röpke] ‘only an artificially continued prosperity developed which was bound to come to an end the moment the state injections of purchasing power upon which it depended, ceased.’ Bad investments had driven out good investments, meaning that governments were not only bound to keep injecting purchasing power, but to increase them. Such, Röpke wrote, was ‘the slippery slope of collectivism.’

How little we have learned from the past.

Acton’s Research Director in the American Spectator:

Europe’s Broken Economies

By Samuel Gregg

During September this year, much of Europe descended into mild chaos. Millions of Spaniards and French went on strike (following, of course, their return from six weeks vacation) against austerity measures introduced by their governments. Across the continent, there are deepening concerns about possible sovereign-debt defaults, stubbornly-high unemployment, Ireland’s renewed banking woes, and the resurgence of right-wing populist parties (often peddling left-wing economic ideas). Indeed, the palpable sense of crisis left many wondering if some European economies have entered a period of chronic decline — one which might eventually reduce Europe to being a bit-player on the world stage.

Obviously we should avoid over-simplification. In Germany and Sweden, for instance, unemployment is declining while economic growth and exports are rising. Not coincidentally, both countries have implemented significant economic reforms over the past ten years. To the audible disappointment of the world’s left-wingers, Sweden is no longer Social Democracy’s poster-child.

Nor can Europe’s present woes be explained in mono-causal terms. Like America, property-bubbles and over-leveraged financial industries played a role in some countries’ meltdowns. But not every European nation presently enduring economic hardship experienced banking crises on the scale experienced by Ireland and Britain.

It will be decades before economists and historians completely diagnose what’s happened to Europe’s economies since 2008. Many, however, will likely conclude that many European countries’ economic culture helped them lurch into seemingly unending crisis.

“Culture” is one of those heavily over-used words. But in sociological and historical terms, “culture” is a way of describing, among other things, the approach to life, the values emphasized, attitudes toward work, the understanding of law, and ultimately the view of science, the arts and religion prevailing in a given society. Over time, these form a type of inheritance that can remain relatively stable in particular historical settings over several generations. (more…)

Blog author: jballor
posted by on Tuesday, September 21, 2010

The conversations over the last few weeks here on work have raised a couple of questions.

In the context of criticisms on the perspectives on work articulated by Lester DeKoster and defended by me, commenter John E. asks, “…what is it that you hope readers will change in their lives, and why?”

I want to change people’s view of their work. I want them to see how it has value not simply as a means to some other end, but in itself. I want to change how they view their relationship to their work.

To echo DeKoster and Berghoef again, many of us simply view work as “a drudge, a bore, a fearful trial.” It may well be that. There is work that is better and work that is worse (to anticipate one of Schumacher’s points below). But we should also know that “the harder it is for you to face each working day, the more your will to persevere schools the soul.”

I want to add a bit of mystery back to the concept of work as well as a bit of spirituality. Again, DeKoster and Berghoef:

The results of one’s work can never be fully known. What will become of the produce raised, of the machine built, of the person fed? No one can foretell what will be the final consequence of today’s effort. Nor does the pay check really measure the value, nor the effort, of the work for which it is given. Wages are set by the market, and the results of work are hidden in the mists of tomorrow. What endures is what happens to the worker who bravely makes it through the day.

An aspect of this perspective, I think, is similar to that articulated by E.F. Schumacher in the essay, “Buddhist Economics” (HT: The Western Confucian).

Grace Marie Boggs notes the importance of the essay, in which Schumacher writes,

The modern economist has been brought up to consider ‘labour’ or work as little more than a necessary evil. From the point of view of the employer, it is in any case simply an item of cost, to be reduced to a minimum if it cannot be eliminated altogether, say, by automation. From the point of view of the workman, it is a ‘disutility’; to work is to make a sacrifice of one’s leisure and comfort, and wages are a kind of compensation for the sacrifice.

By contrast, the view of work in Buddhist economics is that it gives man “a chance to utilize and develop his faculties; to enable him to overcome his ego-centeredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.”

On this point, at least, there is some correspondence between the Christian and the Buddhist view of work as school for the soul. Joshua Snyder relates how Schumacher said of the essay, “I might have called it ‘Christian Economics’ but then no one would have read it.” The views of DeKoster and Berghoef on the one hand and Schumacher on the other are not identical. But what they share is, in Schumacher’s language, a criticism of “a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure.”

In a related vein, David Michael Phelps wonders whether the perspective he articulates between work and art “is something that Reformed theology could/would/does support).”

The answers are affirmative, I believe: Yes, yes, and yes. Beyond the perspective on the schooling of the soul as written by DeKoster and Berghoef, the seventeenth-century theologian and pastor Richard Baxter has valuable things to say about the relationship between work and temporal goods and spiritual and eternal goods. But these are just a small sampling of the rich Reformed resources that can and ought to be brought to bear on these topics.

Phelps will be discussing “Art, Patronage, and Cultural Investment,” at tonight’s Acton on Tap, and he moderated our RFA podcasts on “The Stewardship of Art” (you can listen to part 1 and part 2 respectively).

You can also preorder Lester DeKoster’s little book, Work: The Meaning of Your Life—A Christian Perspective today at the Acton BookShoppe.