Posts tagged with: free-market

Blog author: ehilton
posted by on Wednesday, August 7, 2013

Last week, we took a look at what distributists get right in terms of economics, through the eyes of David Deavel at Intercollegiate Review. Now, Deavel discusses where distributism goes off the rails in that same series. It is a rather long list, rube goldbertbut here are the highlights.

First, Deavel says that simple economics escapes distributists. Despite the fact that economics teaches that actions in the real world have real world consequences, distributists tend to ignore this fact.

They scoff at the notion that there might be predictive laws of economic behavior, such as supply and demand.  But if there are such predictive laws, then it behooves us understand them.  Distributists want third parties, such as governments or guilds, to arbitrarily set wages and prices according to abstract notions of justice.

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As David Deavel points out, free market economists and distributists “are often at each others’ throats.” Deavel is attempting to scrutinize distributism – what it is and what it isn’t – in a series at Intercollegiate Review. He claims that while piece of cakedistributism has its flaws, it has some valid points and there is much good to be found in the arguments of distributists.

So what it distributism?

Distributists like to describe themselves as an alternative or third way that avoids what they describe as the pitfalls of both capitalism and socialism.  They also claim that their system (alone, they sometimes say), is faithful to papal social teaching and the Catholic social tradition more broadly.  Their goal, they claim, is a society of widely distributed property and widely distributed wealth and power.  This differs, they say, from both socialism, in which the state owns the means of production, the vast bulk of wealth, and all power, and from capitalism, which is, they say, a system in which a very few private people own the means of production, wealth, and have the lion’s share of power.

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2940044212701_p0_v1_s260x420How should Protestant Christians think about faith, work, and economics? To help answer that question, the Acton Institute commissioned a series of primers about political economy and the church from four faith traditions: Baptist, Wesleyan, Pentecostal, and Reformed (forthcoming).

Chad Brand, the author of the Baptist primer, Flourishing Faith, was recently interviewed about the book and asked, “What is a Baptist political economy?”

What political economy describes is the interface between government and whatever economic system prevails in a given nation or culture. The political economy in the Soviet Union in the 1980s was a communist state with a socialist understanding of economics — a controlled-market economy. The United States was basically founded as a republic with a free market economy.

So when we introduce the idea of a Christian, and specifically Baptist, political economy, what we’re asking is, “How does the church rub itself up against a free market republic?” “How does a Baptist understanding of theology and ecclesiology interface with that.”

Because Baptists have long held the idea of religious freedom, political freedom, individual freedom and so on, the place where a Baptist political economy most manifests itself is in a kind of republican or libertarian form of economics. “Laissez faire” isn’t in the Baptist Faith and Message, but if you read and believe its statements on government and anthropology, I think you would come to the same conclusion that the government that governs least, governs best.

The notion of political economy has been around for quite some time — the first professor of political economy was a guy by the name of Thomas Malthus at the University of Oxford in about 1815 — but it hasn’t edged its way into evangelical circles until fairly recently.

Read more of the interview here and a review of Flourishing Faith here.

Does the free market encourage moral behavior? Virgil Henry Storr, Research Associate Professor in the Department of Economics at George Mason University, recently wrote a report called “The Impartial Spectator and The Moral Teachings of Markets.” He addresses critics’ concerns that the free market brings out and nurtures human vices.

Countless commentators have stated that “engaging in market activity can be corrupting.” Storr highlights two notable quotes. Aristotle “believed that there was something unnatural about the kind of wealth getting that occurred in the market.” Karl Marx “believed that the market could transform man into a ‘spiritual and physical monster.’”

Storr, who is also Director of Graduate Student Programs in the Mercatus Center, addresses these famous claims with quotes from those who have “made the point that markets are moral training grounds where virtues are rewarded and cultivated.” Michael Novak stated that engaging in trade “teaches care, discipline, frugality, clear accounting, providential forethought … fidelity to contracts, honesty in fair dealings, and concern for one’s moral reputation.” Deirdre McCloskey, Distinguished Professor of Economics at the University of Illinois at Chicago, says:

Capitalism has not corrupted the spirit. On the contrary, had capitalism not enriched the world by a cent nonetheless its bourgeois, antifuedal virtues would have made us better people than in the world we have lost. As a system it has been good for us.”

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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…)

Blog author: ehilton
posted by on Wednesday, December 26, 2012

All good people are concerned about the plight of the poor, and there are a multitude of ways to address this. The umbrella of “social justice” seems to get bigger every year, with Millenium Development Goals, the ONE campaign, and a host of other foreign aid projects that seek to remove the scourge of abject poverty. However, many of these projects overlook one fact: foreign aid doesn’t work.

As PovertyCure‘s Michael Miller has said,

While there are some success stories, aid has been largely ineffective. Now why is that? John Paul II said that “The primary fault of socialism was anthropological in nature.” What he meant was, socialism failed because it got the person wrong. Well, I would argue that aid failed because it gets the person wrong.

Leslie Eastman, of Legal Insurrection, echoes this sentiment in a recent blog post addressing the so-called “fiscal cliff”, stating that the answer to our economic woes is the church, with its focus on subsidiarity, and on the free market. She writes:

Mark Meckler, noted national Tea Party spokesperson and founder of Citizens for Self Governance, recently attended a dinner at the Acton Institute.  The Acton Institute works to promote a free and civil society” characterized by individual liberty and sustained by religious principles.”  A great deal of their efforts are directed at highlighting the benefits of free market to clergy.

“It’s inspiring to know that the Acton Institute exists and is working to effect cultural change in the clergy surrounding the issue of free markets and free societies,” said Meckler.  “The founder of Acton, Father Sirico has written the best book ever on the morality of a free market.  His new book, Defending the Free Market; The Moral Case for a Free Economy, presents a clear and convincing case that a free economy promotes charity, selflessness, and kindness and is the surest route to a moral and socially–just society.”

Knowing that economic justice IS social justice is one step closer to alleviating poverty. Thank you, Legal Insurrection, for helping to spread the word.

Blog author: jcarter
posted by on Friday, November 30, 2012

In a web exclusive preview to the latest issue of Renewing Minds, a new journal of Christian thought from Union University, Jordan Ballor considers the future of free enterprise:

That the United States has been blessed with great prosperity is beyond argument. Even critics of the American system of government and economy admit that the system of free enterprise has been unmatched in its ability to generate wealth. As Hunter Baker notes, this reality has occasioned a shift in the polemic against free enterprise. Pointing to John Kenneth Galbraith’s argument in The Affluent Society, which “implicitly conceded that earlier critics of the free economy had been wrong in their repeated assertions that competitive capitalism failed to yield broad benefits to the public,” Baker observes that “critics of the free market now argue more on the basis of inequality and relative deprivation instead of on the basis of absolute deprivation.”

Where the fairness of the unequal outcomes characteristic of market economies can no longer be assumed, the burden of proof shifts to those who would defend the merits of free enterprise.

Read more . . .

“Scandinavian economies are some of the most market-oriented on the planet” says economist Scott Sumner, who adds “Denmark is the most market-oriented country on earth.”

This peculiar claim is even more curious considering that it is based on the Heritage Foundation’s 2012 Index of Economic Freedom. On the Heritage Index, which ranks countries based on ten components of economic freedom, the United States comes in at #10, lumped in with the “mostly free” countries. All of the Scandinavian countries are lower on the list: Denmark (#11), the Netherlands (#15), Finland (#17), Sweden (#21), Iceland (#27), and Norway (#40).

Each of these countries are considered “less free” on Heritage’s Index than such nations as the U.S., Canada, and Chile, mostly because they have high levels of wealth redistribution. But Sumners thinks that the “size of government and degree of market freedom” are “two completely separate issues.”

The inimitable Bryan Caplan explains why Sumners is wrong and why size of government and economic freedom are inextricably connected:
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You might get goose bumps watching this fiery speech by Fr. Andrew Kemberling. After all, it is not every day we hear a wholesale condemnation socialism from a priest on the “pulpit” of a conservative political rally!

This vociferous pastor from St. Thomas More parish in Centennial, Colo., delivered an impassioned address last May. It may be old news, but the video has gained enormous popularity and even gone viral (over 1.3 million views) just one month before the U.S. presidential elections.

As the free market vs. socialism politicking are growing to a climax, surely more Christian believers like Fr. Kemberling are declaring they too  have “earned a free pass” to engage in this heated debate to express  their strong convictions against centrally planned, godless political regimes. (more…)

Online today on the American Spectator is an article by Acton’s president, the Rev. Robert Sirico. In it, Rev. Sirico discusses the phenomenon of “creative destruction,” peculiar to free market systems, wherein newer and better industries and technology gradually replace older, less efficient ones. Rev. Sirico explains that while on the surface creative destruction appears to be harmful, in the long run it is crucial to a healthy, flourishing economy:

“Sometimes what appears to be beaten back and damaged is really healthy and preparing for new growth. This is the case with what economists call creative destruction — the phenomenon whereby old skills, companies, and sometimes entire industries are eclipsed as new methods and businesses take their place. Creative destruction is seen in layoffs, downsizing, the obsolescence of firms, and, sometimes, serious injury to the communities that depend on them. It looks horrible, and, especially when seen through the lives of the people who experience such economic upheaval, it can be heartrending.

But think of the alternative. What if the American Founders had constructed a society where no industry was ever allowed to go under because it would mean a lot of innocent people losing their jobs? I mean, have you ever met a livery yard owner or a stable boy? How about a blacksmith or a farrier? Do you have among your acquaintances any makers of bridles, saddles, chaises, coaches, or buggy whips?

Read the entire article here.