Posts tagged with: economics

I spent last week in London attending a couple of stimulating conferences at the Institute for Economic Affairs (IEA) and the Transformational Business Network (TBN), and catching up with some friends and acquaintances. All of the discussions were either officially off-the-record or of a personal nature, so I can’t be too specific about who said what but my general impression, obvious to anyone who’s visited, is that London remains an extremely vibrant, forward-looking, prosperous global capital in stark contrast to much of Europe and even other parts of Britain. But the reasons why are varied and may upset some seemingly-settled orthodoxies about religion and wealth.

London’s wealth is certainly tied to the City and international finance, even if giants such as the Royal Bank of Scotland are posting record losses (£9 billion in 2013). There’s much distress about such losses, especially subsequent to the massive bailouts RBS and other banks received in the wake of the 2008 financial crisis. We often forget that making bad investments and taking losses is part of the normal, necessary functioning of the market economy; Milton Friedman went so far to say that losses are even more important the profits. Wealth can’t be created if we don’t allow losses to get rid of badly-managed or mistaken enterprises.

No one wants to fail, of course, but without failure, we can’t have success, even at the individual level. I’m reminded of a Teddy Roosevelt image we used to have at the office of my college newspaper emblazoned with the words, “The only man who never makes mistakes is the one who never does anything.” Certainly true, even if the vice of sloth and complacency often tells us otherwise; what’s more important is to learn from one’s mistakes and try again.

Critics of capitalism have often cited the constant striving and relentless competition as negative aspects; what’s the point of hard work, after all, if we can never enjoy its fruits? The austerity and disciple required by the market are sometime called “Protestant” because they supposedly imply a pessimistic, individualistic view of human nature, as opposed to Catholicism’s more positive, “relaxed,” social view. Made famous by the German sociologist Max Weber, this thesis has always seemed to contain some elements of truth but never completely accurate to me, and my time in London confirmed my doubts. (more…)

Comedian Andrew Heaton uses the move “Dallas Buyer’s Club” to explain economic issues, brought to life on the silver screen. Enjoy!

A brothel corridor in Pascha, Cologne

A brothel corridor in Pascha, Cologne

It’s the oldest profession, right? It’s worldwide, and attempts to criminalize it don’t seem to work. Does legalizing prostitution solve any problems?

That’s the question Nisha Lilia Diu of The Telegraph set out to answer. In a lengthy piece that focuses on Germany, Diu visited brothels, talked to their owners, visited with prostitutes – all in order to see if the legalization of prostitution “works.”

Germany legalized prostitution in 2002. The law was meant to to do a number of things, but primarily it was meant to give prostitutes legal standing, making their job like any other. Was it effective?

The idea of the law, passed by Chancellor Gerhard Schröder’s Social Democrat-Green coalition, was to recognise prostitution as a job like any other. Sex workers could now enter into employment contracts, sue for payment and register for health insurance, pension plans and other benefits. Exploiting prostitutes was still criminal but everything else was now above board. Two female politicians and a Berlin madam were pictured clinking their champagne glasses in celebration.

It didn’t work. “Nobody employs prostitutes in Germany,” says Beretin. None of the authorities I spoke to had ever heard of a prostitute suing for payment, either. And only 44 prostitutes have registered for benefits.

(more…)

Philosopher and theologian, Michael Novak recently delivered a speech at the Catholic University of America on the vocation of business and Forbes published the transcript. Novak argues that “capitalism is lifting the world out of poverty.” As many Asian and African economies shift from socialist to capitalist, they are seeing enormous economic growth, and small businesses are the force behind these economic gains:

Even in developed nations, most jobs are found in small business. In Italy, over 80 percent of the working population works in small businesses. In the U.S., the proportion is just about 50 percent, but some 65 percent of new employment is in small businesses.

During the great economic expansion of 1981-1989, the U.S. added to its economy the equivalent of the whole economic activity of West Germany at that time. Sixteen million new jobs were created in the U.S., the vast number of them in small businesses. Startups peaked as new businesses came into being at a rate of 13 percent (as a portion of all businesses) – an all-time high. Much the same happened under Clinton in 1993-2001, but even better – 23 million new jobs were created.

In the creation of small businesses, four factors are necessary. First, ease and low cost of incorporation; second, access to inexpensive credit; third, institutions of instruction and technical help (such as the system of local credit unions in the U.S.), and the steady assistance of the extension services of the A&M universities; and, fourth, throughout the population habits of creativity, enterprise, and skills such as bookkeeping and the organization of work. Economic development is propelled, as John Paul II said, by know-how, technology, and skill (Centesimus Annus 32). Therein, perhaps, lie the greatest entry-points for Americans and others who wish to help poor nations by proffering assistance in economic development from the bottom up. (more…)

I have five kids. I thought I was sane, but apparently, I’m living a crazy alternative lifestyle.

Freestyle halfpipe skier David Wise won gold at Sochi. NBC, rather than being impressed with his world-class athleticism, focused on his “alternative lifestyle.” You see, Wise is married to Alexandra, and they have a young son. Wise is also considering becoming a pastor.

San Diego Chargers quarterback Phillip Rivers has had his critics in terms of his play, but there are also critics of his “alternative lifestyle”: he and his wife, Tiffany, have six kids (they recently had a seventh child.) ESPN noted with this comment:

Six kids? Regardless of your profession, it’s impossible to be a good parent to six kids. Not enough hours in the day.

(more…)

Blog author: dpahman
Monday, February 24, 2014
By

Today at Red River Orthodox, I offer a brief introduction to the liberal tradition for Orthodox Christians living in the West:

Liberalism, historically, is a broad intellectual tradition including a large and disparate group of thinkers. The epistemological differences between John Locke, David Hume, and Immanuel Kant do not stop them all from being liberals. In economics the range extends from Friedrich Hayek to John Maynard Keynes. In political philosophy, from John Rawls to Robert Nozick. For that matter, both the American and French Revolutions have liberal foundations, though often (and rightly) contrasted.

I conclude by encouraging a more nuanced engagement with the West than is sometimes the case in the East:

[F]or a responsible, “liberal engagement” with the West from an Orthodox Christian perspective, it will not do to dismiss anything we don’t like as Western and liberal and, therefore, wrong. As Solzhenitsyn put [it], “the line dividing good and evil cuts through the heart of every human being.” And if that is true, then both East and West, including Western liberalism, have plenty of good and evil to go around.

How might Orthodox Christians better evaluate one of the many liberalisms that make up the water in which we swim in the West today?

To give an example, I would positively recommend to my fellow Orthodox Christians the German ordoliberal school of economic thought for the following reasons: (more…)

thinkingWe read the same Bible and follow the same Jesus. We go to the same churches and even agree on the same social issues. So why then do liberal and conservative evangelicals tend to disagree so often about economic issues?

To explore that question I recently wrote a series of posts explaining “What Liberal Evangelicals Should Know About the Economic Views of Conservative Evangelicals.” The posts covered 12 principles that generally drive the thinking of conservative evangelicals when it comes to economics:

1. Good intentions are often trumped by unintended consequences.
2. Our current economic and historical context must be taken into account when applying Biblical principles
3. To exploit the poor, the rich need the help of the government.
4. We love economic growth because we love babies.
5. The economy is not a zero sum game.
6. Inequality and poverty in America is more often a matter of personal choice than structural injustice.
7. The best way to compensate for structural injustice is to increase individual freedom.
8. Saddling future generations with crippling debt is immoral.
9. Social mobility — specifically getting people out of poverty — is infinitely more important than income inequality.
10. Jobs that lead to human flourishing are the most important part of a moral economy.
11. Free markets are information systems designed for virtuous people
12. Free markets are the best way to serve free people.

To make it easier to read, I’ve compiled the entire series into a single essay, which can be downloaded in PDF or text format here.

minwage11Acton’s Director of Research, Samuel Gregg, recently  wrote about the effects of raising the minimum wage at the National Review Online. The latest CBO report estimates that increasing the minimum wage to over $10/hour in 2016 will not greatly affect the poorest in society; it is estimated that this increase will only help 2% of those living in poverty. The benefit of the increase will go to people “already comfortably above the poverty line.” Gregg discusses this phenomenon:

Is that just?

Given the minimal (pardon the pun) effects of mandated minimum wages upon poverty, one must ask why some people invest so much intellectual energy and political capital in a policy that tends to benefit, for example, teenagers and young people from comfortable backgrounds who won’t be staying in minimum-wage jobs for very long.

In part it’s the top-down approach at work. Legislating minimum wages gives us the illusion that legislators and governments can flip a switch and make things better. Legislated minimum wages, however, aren’t immune from the workings of supply and demand. (more…)

JMM_16 2The most recent issue of the Journal of Markets & Morality, vol. 16, no. 2, has been published online at our website (here). This issue’s articles explore a range of subjects from biblical understandings of poverty, Islamic scripture, John Locke, the ills of apathy, an Eastern Orthodox view of the family and social justice, and much more.

In addition, this issue includes our regular symposium of the papers from the Theology of Work Consultation at the Evangelical Theological Society’s 2012 conference.

2013 marked several important anniversaries, as executive editor Jordan Ballor points out in his editorial, (more…)

Pope Francis

Pope Francis

Kishore Jayabalan, Director of Istituto Acton in Rome, recently interviewed with the BBC to discuss Pope Francis’ views on poverty and economics as the pope enters the second year of his papacy. Enjoy the report via the audio player below.