Posts tagged with: free markets

In 1978, John Mackey was 25-year-old college dropout who believed that democratic socialism was a more “just” economic system than democratic capitalism. But his views soon changed after he and his girlfriend borrowed $45,000 from family and friends to open a small vegetarian grocery store in Austin, Texas. Although he was only earning $200 a month from his struggling business, his friends on the left viewed him as a “capitalistic exploiter” who was overcharging his customers and exploiting his workers.

jmackeyIn a nutshell the economic system of democratic socialism was no longer intellectually satisfying to me and I began to look around for more robust theories which would better explain business, economics, and society. Somehow or another I stumbled on to the works of Mises, Hayek, and Friedman, and had a complete revolution in my world view. The more I read, studied, and thought about economics and capitalism, the more I came to realize that capitalism had been misunderstood and unfairly attacked by the left. In fact, democratic capitalism remains by far the best way to organize society to create prosperity, growth, freedom, self-actualization, and even equality.

Mackey’s small store morphed into Whole Foods Market, which now has 345 stores and $4 billion in annual sales, but he’s still an advocate of free markets who believes that capitalism is misunderstood. In a recent speech Mackey claimed that, “capitalism has a serious branding problem . . . the recent recession was . . . blamed on greedy financial corporations, deregulation, and capitalism—market failures—rather than on bad government regulations and monetary policies—government failures.”
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Blog author: jcarter
posted by on Tuesday, February 5, 2013

Lee Habeeb and Mike Leven explain why it’s essential to make the moral case for conservatism:

If there is a single reason why conservatives continue to lose the battle of ideas, it’s because we don’t make the moral case for freedom and free markets. Our political class instead makes the economic case for our philosophy. Our smart guys are so impressed with their own intelligence, they think we can win the debate using numbers and data, charts and graphs, and political tactics and strategy.

It’s the Left’s secret advantage. They create the feeling that they care more about the average American because they make the moral case for their philosophy.

[. . .]

As the state takes more of our money, there is less for us to give to churches, synagogues, and mosques who take care of the weakest among us. And not just with a check, but with a caring human being connected to that material support.We can point to 20th-century Europe’s experience. As the state grew, the churches there had less influence and eventually emptied.

Read more . . .

Over at Ricochet, Peter Robinson broaches the oft asked question about intellectuals and their disdain and rage against capitalism. Robinson unearthed Robert Nozick’s, “Why Do Intellectuals Oppose Capitalism?” Nozick declared,

The schools, too, exhibited and thereby taught the principle of reward in accordance with (intellectual) merit. To the intellectually meritorious went the praise, the teacher’s smiles, and the highest grades. In the currency the schools had to offer, the smartest constituted the upper class. Though not part of the official curricula, in the schools the intellectuals learned the lessons of their own greater value in comparison with the others, and of how this greater value entitled them to greater rewards.

The wider market society, however, taught a different lesson. There the greatest rewards did not go to the verbally brightest. There the intellectual skills were not most highly valued. Schooled in the lesson that they were most valuable, the most deserving of reward, the most entitled to reward, how could the intellectuals, by and large, fail to resent the capitalist society which deprived them of the just deserts to which their superiority “entitled” them? Is it surprising that what the schooled intellectuals felt for capitalist society was a deep and sullen animus that, although clothed with various publicly appropriate reasons, continued even when those particular reasons were shown to be inadequate?

The entire essay is thoughtful and worth the read and it reminded me of some of my own observations of life at Ole Miss, my own Alma Mater. Much of what Nozick explains in the essay may be magnified at a school that has a similar cultural makeup as that one. The University of Mississippi or Ole Miss, at least from my own experience, is a very solid public university. There are some excellent professors in residence, especially within the college of liberal arts. For a public university, especially when it comes to capitalism and cultural norms, the student body is relatively conservative. I would say though from my own experience, however, it isn’t a place of grand academic probing or curiosity for most students. How many colleges genuinely can claim that characteristic today, though? That is not to say students are less intelligent or thoughtful than elsewhere.

A deep intellectual curiosity among the student body, in most cases, would not ingratiate you towards your peers and it certainly did you little favor in the social scene. I immediately noticed a tension between some of the academics and a large portion of the student body. Social development, popularity, networking, and the general social scene was all the rage for many students. Whether it was through popular fraternities and sororities and social gatherings, those activities and influences took precedence over the academy and academic pursuits.

A lot students came from financially successful families and many of those families were popular in Mississippi. They had little interest in repudiating their background, upbringing, and many of the cultural norms that surrounded them. While some academics on campus wanted the students to at least in part, to repudiate some of those values and norms. And many of those same students – who might be described as not “academic” or “intellectual” – were masters of the social scene, where often financial success comes in life, especially in the field of business and entrepreneurial enterprise. The resentment of some in academic circles was palpable. They felt betrayed by the wider culture – no beautiful woman at their side, no expensive sport utility vehicle, and little popularity. Thus there was a feeling that the system is rigged and unfair. I suspect in many of the the more traditional campus settings, feelings like this are especially common.

There has been a lot written on the topic of the academy’s rants and raging against the free market. Certainly much of it has to do with the deep perception that some professors aren’t rewarded to a greater degree than those that are less academic but maybe more socially astute in life and business.

Perhaps the best examples today are the professors in SEC schools who carry impressive academic degrees and credentials but are dwarfed in salary by football coaches with motorcades bigger than the state governor, and a support staff greater than entire academic departments on campus. They are a visible reminder of the popular jock who got the girl, while simultaneously, being the most admired figure on campus. Is capitalism or the free market really to blame though?

Nicholas Freiling offers three helpful suggestions for how advocates of liberty can defend the free market:

1. Raising questions is always better than giving answers.

Capitalism defends itself. It is logical, coherent and well-supported. The last thing it needs is your careless, back-of-the-napkin arguments that can sometimes do more harm than good.

Instead of arguing defensively with your friends, try raising some interesting questions. Ask them about their beliefs. Why do they think like they do? What do they think about our economic future? How do they propose the government deal with things like inflation, student loan debt and gun control?

If you’re like me, you’ll quickly find that questions build bridges and create mutual understanding. If you’re lucky, your friends will begin to seriously consider their own opinions, and will become more open to listening to alternative points of view. Helping others come to their own opinions will create more lasting change than asking them to adopt yours.

Read more . . .

In an essay for Big Questions Online, a site that examines questions of human purpose and ultimate reality, Rev. Robert Sirico considers whether morality is intrinsic to the free market:

Is a hammer intrinsically moral?

Your reply would most immediately be: “It depends on what it was used for. If employed to bash in the heads of people you do not like, the answer is no. If employed to help build a house for a homeless people, your answer might be yes. In either case, the precise answer is to say that the hammer is neither moral nor immoral; it is the person who chooses its use that can be evaluated morally.

Attending to these Big Questions will enable us to more deeply evaluate the economic organization of society. So the real issue here is not a financial one, but an anthropological one: What is man? Who am I? Why am I here? Where did I come from? Where am I going? What are my responsibilities to myself and others? How we answer these kinds of questions will have an enormous impact on every facet of our lives, including how we work and buy and sell, and how we believe such activities should be directed— in other words, on economics.

Read the rest of the article and join in the conversation at Big Questions Online.

Blog author: jcarter
posted by on Friday, October 26, 2012

AEI recently held a contest challenging people to make a video that could articulate a moral case for free markets in two minutes or less. The $40,000 top prize was won by Jared Fuller with this entry, “The Moral Paper Route.”

At AEI’s Values & Capitalism blog, Julia Thompson talks to Fuller about the making of the video.

Blog author: jcouretas
posted by on Tuesday, September 11, 2012

On his personal blog, author and publishing industry executive Joel J. Miller asks, “What if we dumped Rand for Röpke?” Good question. Miller says that it’s simply unnecessary for Christians to invoke Rand in their defense of the free market. Why not base that defense on the work of a Christian economist instead?

“Unlike Rand,” he writes, “Röpke grounded his critique of socialism and his defense of free markets in a thoroughly Christian understanding of man and his world.” He goes on to say that not only is this critique “of an entirely differing quality than Rand’s, it’s far deeper as well. Röpke saw the materialist answers of socialism as papering over the spiritual crisis that beset Western civilization in the middle twentieth century, and still does to this day.”

Miller also includes a link (bottom of post) to a free, downloadable copy of Röpke’s The Humane Economy.

The PowerBlog has archived a number of articles on Röpke by Samuel Gregg, Acton Research director and author of Wilhelm Ropke’s Political Economy (Edward Elgar, 2010).

In the archives you’ll find links to the July 2 American Spectator piece titled “The Prophet of Europe’s Crisis” and have access to “The Profoundly anti-Keynesian Political Economy of Wilhelm Röpke,” a new podcast on the Library of Law and Liberty.

Last week, PowerBlogger Andrew Knot and I wrote posts about American sugar policy and farm subsidies, respectively. Now, the United States Conference of Catholic Bishops, as well as the Catholic Relief Services and National Catholic Rural Life Conference, have come out with a joint letter on the 2012 farm bill that just passed the Senate. Among other things, they urge Congress to reduce agricultural subsidies, and limiting crop insurance to small and medium sized farms.

In 2010, the government gave out $96 billion in farm subsidies. As I pointed out last week, the median farmer’s income is already 25 percent higher than the median American’s. Furthermore, most of the farm money is going to a small number of the farmers. Big farms tend to get a much larger share of the handout than small and medium sized farms do. American agricultural policies represent welfare and protectionism for the already well off.

The USCCB’s letter can be read here.

Because there’s nothing sweet about it.

As the 2012 Farm Bill moves through Capitol Hill, the policy debates are ramping up. The bill, projected to seriously cut the deficit, has garnered bipartisan support thus far, but will likely meet more resistance in the House. Whether or not the 2012 Farm Bill will cut its projected $23 billion dollars is subjective. Fluctuating crop prices and the extent to which the weather cooperates (pray for rain) will determine that. What is certain, however, is that under the the proposed legislation, Americans will continue to pay too much for sugar. As it stands now, the bill keeps the existing sugar program entirely intact. This benefits the 61,000 Americans employed in the sugar industry and works to the detriment of taxpayers, sugar farmers in the developing world, and the 988,000 U.S. employees in industries that rely on sugar.

U.S. sugar policy, touched on in PowerBlogger John MacDhubain’s Tuesday post and Tad DeHaven’s Cato post from June, is essentially mercantilism and a prime example of regulation getting in the way of economic progress. On average, taxpayers spend $2.4 billion annually on sugar to raise $1.4 billion for American sugar producers.

What’s more, these government-mandated favors naturally come at the expense of others. Think of the sugar farmer in the developing world, whose access to economic liberty is severely limited by the U.S. government’s policy of price supports, trade restrictions, and domestic quotas. Then consider the American jobs lost when, about a decade ago, Life Savers moved a plant from Holland, Michigan across the border into Canada. The move cost Americans hundreds of jobs while saving the candy company $90 million. The Coalition for Sugar Reform estimates that for every American sugar growing job saved by the policy, three more are lost.

Fiscal policies cannot avoid moral consequences. Job loss and the stifling of economic development are moral issues just as much as they are fiscal or political. The way forward demands new policies rooted and sound economic and moral thinking. Presently, American sugar policy is not only fiscally inefficient, it’s morally bankrupt. And there’s the bad jokes.

In response to the Supreme Court ruling on Obamacare’a individual mandate, National Review Online launched a symposium — a roundup of commentary — which posed the following question: “What’s next for both conservatives and the Republican party on health-care reform?” Acton Research Director Samuel Gregg contributed this analysis:

Leaving aside the arguments that will continue about the SCOTUS ruling on Obamacare, one response of those who favor free markets and limited government must be for them to start preparing themselves for what will eventually happen, regardless of the results of the 2012 presidential election. And that’s Obamacare’s eventual economic demise. The economic track record of socialized medicine is very clear. Sooner or later, it implodes. Britain’s National Health Service is a perfect example. Even Sweden has realized that socialized medicine (and generous welfare states more generally) are unaffordable in the long term, and it has begun allowing private providers into its health-care market. In short, Obamacare’s essential economic unfeasability and extensive bureaucratization of health care (not to mention its disproportionately negative impact on the poor) will become all too clear in time. When that happens, conservatives must have off-the-shelf plans ready to go in order to restore sanity to the asylum of socialized medicine.

However, it’s also plain that conservatives, beyond citing the raw economics of real health-care reform, must ballast their case against socialized medicine with moral and cultural arguments. Far too many conservatives and free marketers critique socialized medicine almost solely in terms of efficiency and effectiveness. Economic analyses and arguments are important, but not many people will put everything on the line for a calculus of utility. Instead, critics must draw attention to the ways in which socialized medicine (1) saps personal responsibility, (2) facilitates the spoiled-brat entitlement mentality presently reducing much of Europe to an economic laughingstock, and (not least among such concerns) (3) creates an impossible situation for those of us who on grounds of faith and reason cannot and will not participate in schemes that legally require us to cooperate in other people’s choices for moral evil.

We can win numerous economic arguments. In some respects, that’s actually the easy part. But until we decisively shift — and win — the moral debate, the battle will be uphill all the way.

Read other viewpoints on NRO’s “What’s Next for the Opposition?”