Posts tagged with: free markets

Acton President Rev. Robert A. Sirico continues to promote Defending the Free Market: The Moral Case for a Free Economy on radio and television across the country; today’s roundup of media includes two radio interviews on west coast radio stations, starting with host Brian Sussman on the KSFO Morning Show in San Francisco, California:

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Next came a trip up the coast to Medford, Oregon and the Bill Meyer Show on KMED:

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Keep checking back for more clips here on the PowerBlog; we’ll post them as we can find them.

If you haven’t ordered your copy of Defending the Free Market: The Moral Case for a Free Economy, what are you waiting for? For those who still need some convincing, Rev. Robert Sirico continues to make the media rounds, and we continue to bring you the highlights.

Last night, Rev. Sirico was the guest of Raymond Arroyo on The World Over on the EWTN network; you can watch his 20 minute appearance below:

Father Robert also made a radio appearance last night on WLCR in Louisville, Kentucky:

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This morning, Rev. Sirico joined the KZIM Morning Meeting to discuss the book in southeast Missouri:

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And then followed that up with a very positive interview with Stuart Varney on Varney & Co. on the Fox Business Network:

Keep checking back on the PowerBlog; we’ll keep posting updates as Father Robert continues his media tour.

On his Koinonia blog, Rev. Gregory Jensen reviews Rev. Robert Sirico’s new book, Defending the Free Market: The Moral Case for a Free Economy.

Jensen:

“Daring though the argument is, especially for a Catholic priest, it is also essential that it be made since for too many people (including business people), free market economic theory and policies are little more than a justification for greed. While not denying the excesses of capitalism and real sins of capitalists, Fr Sirico wisely doesn’t allow sin to have the last word. Rather, and like St Augustine who inspired his own spiritual journey, the helps us see the goodness hidden beneath the distorting effects of moral failure.

Though irenic in tone, Sirico is unwilling to cede ground to those who imagine—wrongly in his view—that “socialism, liberalism, collectivism, and central planning” (p. 185) are morally superior and more effective in generating wealth. They aren’t and however noble the intention they are come up morally and practically short because they neither anthropological sound nor effective in caring for the material needs of the human person. The latter is especially the case when we turn to the needs of the most vulnerable among us. It is the free market that best fits the truth of the human person. And it is only the free market that has demonstrated the ability not only to lift the human person out of the poverty that was the almost universal lot of humanity even as late as 200 years ago.”

Read “More than Mere Economics” here.

Our friends at the Foundation for Research on Economics & the Environment (FREE) in Bozeman, Mont., have put together another strong slate of summer programs for clergy, seminary professors and other religious leaders with the aim of deepening their understanding of environmental policy. In its description of the program, FREE notes that many in faith communities “see an inherent conflict between a market economy and environmental stewardship.”

Major religious groups assert that pollution, deforestation, endangered species, and climate change demonstrate a failure of stewardship that requires reform. And of course they are correct—what, however, are the incentives and information generated by alternative reform policies? Some policies can have profoundly negative impacts on social well-being.

FREE’s goal is to help increase the understanding of religious leaders as they approach environmental policy. These leaders are influential nodes in a network of congregations, providing a conduit to disseminate market-based environmental ideas, potentially to millions of Americans.

FREE will help religious leaders understand the political economy dimensions of environmental policy reform. We will explain how basic economic principles can help achieve green goals with minimum sacrifice to social welfare. Together we will explore how a culture that values America’s founding ideals, secure property rights, and responsible prosperity, can also foster a healthy environment and promote social justice.

I’ve been to a number of these FREE events and have been impressed with the content — and that’s from someone who has grown “seminar averse” over the years. At FREE, faith leaders get the economic insights that are necessary for a deeper understanding of environmental stewardship. On the other side, policy analysts — including some of the FREE lecturers — get the faith insights that they do not ordinarily have access to in their own specialized fields. Yes, it is possible to bring together economic and moral thinking.

In a Bozeman Daily Chronicle piece titled “Environmental Stewardship and Social Justice,” FREE Chairman John Baden writes: (more…)

The philosophical demise of socialism has caused many on the economic left to change their complaint about free-market capitalism. While it may be effective, they now say, it comes at the cost of human goods like community and social solidarity. Such claims are now commonplace in policy debates. But are they true?

James R. Otteson explains why such criticism are not as strong as some people might think:
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Calvin Coolidge quipped shortly before his death, “I feel I no longer fit in with these times.” The words came not long before FDR’s ascendency to the presidency and not long after the upsurge of government activism that started in the Herbert Hoover administration. Coolidge, even for his time, was seen as old fashioned, a throw back to simpler values, ethics, and principles. Coolidge cut the name tags out of his suits when he asked his wife to resale them, so not to profit from his name and position. He was lampooned for his hands off approach to the presidency. Ronald Reagan was even teased by the Washington Press Corps for hanging up a portrait of Coolidge in the White House. By many academics today, Coolidge is chiefly mischaracterized as a simpleton largely from quotes like “The chief business of the American people is business.” In that speech in 1925 delivered to newspaper editors, Coolidge also went on to say, “Of course the accumulation of wealth cannot be justified as the chief end of existence.”

I can’t help but feel that a new appreciation for Coolidge is long overdue. Why? Because almost everything Coolidge warned against is happening now. As the nation faces government mismanagement, rapid growth of centralized power, crippling debt, decline of purpose, and moral decay, the clarity of his ideas are magnified. Coolidge is also the subject of a new biography by Amity Shlaes due out in June. As a public servant, he is vastly underrated for his writing and speeches. He spoke in a manner that was easily understood and he popularized the message of thrift, limited government, religious principles, and conservatism. But there too was an intellectual depth to his remarks about conservatism not seen today by the popular dispensers of those ideas.

One wonders if there will be a major candidate in the general presidential election to offer a defense of the free economy. And in doing so, can defend the great need for morality and virtue within the free market.

Below is a speech Coolidge gave in 1916 as Lieutenant Governor of Massachusetts on the issues of character, the commercial society, and materialism. The remarks were given to the Brockton, Mass. Chamber of Commerce. Coolidge’s remarks are printed in their entirety.

Man’s nature drives him ever onward. He is forever seeking development. At one time it may be by the chase, at another by warfare, and again by the quiet arts of peace and commerce, but something within is ever calling him on to “replenish the earth and subdue it.”

It may be of little importance to determine at any time just where we are, but it is of the utmost importance to determine whither we are
going. Set the course aright and time must bring mankind to the ultimate goal.

We are living in a commercial age. It is often designated as selfish and materialistic. We are told that everything has been commercialized. They say it has not been enough that this spirit should dominate the marts of trade, it has spread to every avenue of human endeavor, to our arts, our sciences and professions, our politics, our educational institutions and even into the pulpit; and because of this there are those who have gone so far in their criticism of commercialism as to advocate the destruction of all enterprise and the abolition of all property.

Destructive criticism is always easy because, despite some campaign oratory, some of us are not yet perfect. But constructive criticism is not so easy. The faults of commercialism, like many other faults, lie in the use we make of it. Before we decide upon a wholesale condemnation of the most noteworthy spirit of modern times it would be well to examine carefully what that spirit has done to advance the welfare of mankind.

Wherever we can read human history, the answer is always the same. Where commerce has flourished there civilization has increased. It has not sufficed that men should tend their flocks, and maintain themselves in comfort on their industry alone, however great. It is only when the exchange of products begins that development follows. This was the case in ancient Babylon, whose records of trade and banking we are just beginning to read. Their merchandise went by canal and caravan to the ends of the earth. It was not the war galleys, but the merchant vessel of Phoenicia, of Tyre, and Carthage that brought them civilization and power. To-day it is not the battle fleet, but the mercantile marine which in the end will determine the destiny of nations. The advance of our own land has been due to our trade, and the comfort and happiness of our people are dependent on our general business conditions. It is only a figure of poetry that “wealth accumulates and men decay.” Where wealth has accumulated, there the arts and sciences have flourished, there education has been diffused, and of contemplation liberty has been born. The progress of man has been measured by his commercial prosperity. I believe that these considerations are sufficient to justify our business enterprise and activity, but there are still deeper reasons.

I have intended to indicate not only that commerce is an instrument of great power, but that commercial development is necessary to all human progress. What, then, of the prevalent criticism? Men have mistaken the means for the end. It is not enough for the individual or the nation to acquire riches. Money will not purchase character or good government. We are under the injunction to “replenish the earth and subdue it,” not so much because of the help a new earth will be to us, as because by that process man is to find himself and thereby realize his highest destiny. Men must work for more than wages, factories must turn out more than merchandise, or there is naught but black despair ahead.

If material rewards be the only measure of success, there is no hope of a peaceful solution of our social questions, for they will never be large enough to satisfy. But such is not the case. Men struggle for material success because that is the path, the process, to the
development of character. We ought to demand economic justice, but most of all because it is justice. We must forever realize that material rewards are limited and in a sense they are only incidental, but the development of character is unlimited and is the only essential. The measure of success is not the quantity of merchandise, but the quality of manhood which is produced.

These, then, are the justifying conceptions of the spirit of our age; that commerce is the foundation of human progress and prosperity and the great artisan of human character. Let us dismiss the general indictment that has all too long hung over business enterprise. While we continue to condemn, unsparingly, selfishness and greed and all trafficking in the natural rights of man, let us not forget to respect thrift and industry and enterprise. Let us look to the service rather than to the reward. Then shall we see in our industrial army, from the most exalted captain to the humblest soldier in the ranks, a purpose worthy to minister to the highest needs of man and to fulfill the hope of a fairer day.

A practical man?

On the American Spectator, Acton Research Director Samuel Gregg examines the baleful influence exerted on economic thought and public policy for decades by John Maynard Keynes. Gregg observes that “despite his iconoclastic reputation, Keynes was a quintessentially establishment man.” This was in contrast to free-market critics of Keynes such as Friedrich Hayek and Wilhelm Röpke who generally speaking “exerted influence primarily from the ‘outside’: not least through their writings capturing the imagination of decidedly non-establishment politicians such as Britain’s Margaret Thatcher and West Germany’s Ludwig Erhard.” Perhaps not so surprisingly, many of Keynes’ most prominent devotees are also “insider” types:

The story of Keynes’s rise as the scholar shaping economic policy from “within” is more, however, than just the tale of one man’s meteoric career. It also heralded the surge of an army of activist-intellectuals into the ranks of governments before, during, and after World War II. The revolution in economics pioneered by Keynes effectively accompanied and rationalized an upheaval in the composition and activities of governments.

From this standpoint, it’s not hard to understand why New Dealers such as John Kenneth Galbraith were so giddy when they first read Keynes’s General Theory. Confident that Keynes and his followers had given them the conceptual tools to “run” the economy, scholars like Galbraith increasingly spent their careers shifting between tenured university posts, government advisory boards, international financial institutions, and political appointments — without, of course, spending any time whatsoever in the private sector.

In short, Keynes helped make possible the Jeffrey Sachs, Robert Reichs, Joseph Stiglitz’s, and Timothy Geithners of this world. Moreover, features of post-Keynesian economics — especially a penchant for econometrics and building abstract models that borders on physics-envy — fueled hopes that an expert-guided state could direct economic life without necessarily embracing socialism. A type of nexus consequently developed between postwar economists seeking influence (and jobs), and governments wanting studies that conferred scientific authority upon interventionist policies.

Read Samuel Gregg’s “The Madness of Lord Keynes” on the American Spectator.

Blog author: rnothstine
posted by on Wednesday, October 5, 2011

My commentary this week addresses the demonstrations in New York and in other cities against free enterprise and business. One of the main points I make in this piece is that “lost in the debate is the fundamental purpose of American government and the importance of virtue and a benevolent society.” Here is the list of demands by the “Occupy Wall Street” movement. It is in essence a laundry list of devastating economic schemes and handouts. Additionally, the demands are counter to America’s founding principles. The commentary is printed below:

Class Warriors for Big Government

By Ray Nothstine

Acting as unofficial scorekeeper, Sojourners Founder and CEO Jim Wallis recently declared, “There really is a class war going on, and the upper class is winning.” However, many of the class warfare protesters who are taking to the streets to “occupy” Wall Street and American cities are the disgruntled children of well-to-do parents. A quick sampling of video clips from the protests shows students from elite universities like Harvard, George Washington, and Columbia. Such protestors are driven less by genuine economic hardship than by misguided animus toward the market system that has enabled the wealth from which they have benefited.

One such protestor, Robert Stephens, launched into a tantrum about a bank seizing his well-educated parents’ $500,000 home. The claim turned out to be bogus, but he managed to convince sympathetic media outlets that he was the victim of abuse and scorn at the hand of free enterprise. Stephens, a student at the prestigious George Washington School of Law in Washington, is just one of many out-of-touch protestors pointing simplistically to the market as the culprit in the current economic downturn while ignoring other sources of financial dysfunction, such as the crony capitalism of government subsidies to business or government fiscal irresponsibility.

Struggling to make ends meet, most Americans lack the time to tune into protestors who are just as distant from their problems as Washington bureaucratic elites. Ronald Reagan offered these poignant words as he called on his own political party in the 1970s to shed its big-business country club image and to embrace the factory worker, the farmer, and the cop on the beat:

Extreme taxation, excessive controls, oppressive government competition with business, frustrated minorities and forgotten Americans are not the products of free enterprise. They are the residue of centralized bureaucracy, of government by the self-anointed elite.

Excessive taxation, regulation, and centralization of power always save their most vicious bite for the middle class. They are the hardest hit, not the super wealthy, some of whom call for higher taxes and are fawned over by a bloated government with an insatiable appetite for revenue. If there is any class conflict, it will come from the taxpaying class as it tries to tame the avarice of the political class. Most Americans are not very sympathetic to radical protestors because they still believe in an American Dream of limitless potential and opportunity.

While some protestors call for more government—or even the use of force—to restore their version of social justice and utopian economic schemes, lost in the debate is the fundamental purpose of American government and the importance of virtue and a benevolent society.

This nation’s founders adopted a system of government emphasizing a separation of powers and federalism to protect private property and the harmony of the Republic. Protestors calling for a dismantling of these ideas, whether it is through the confiscation of another’s property or through massive, centralized power seem alien to most Americans. During his inauguration another American President, Bill Clinton, aptly declared, “There is nothing wrong with America that cannot be cured by what is right with America.”

The virtues and values that have shaped our Republic offer the best for America. One of the wealthiest men of America’s founding era was John Hancock. Yet the man who once quipped, “They [the Crown] have no right to put their hands in my pocket,” was no miser. Often a political foe of the founder known for his oversized signature on the Declaration of Independence, American President John Adams nonetheless wrote, “If benevolence, charity, generosity were ever personified in North America, they were in John Hancock.” Hancock supported churches, city improvements, the arts, assisted widows, and paid for the education of orphans. However, a much greater compliment was bestowed upon him. He was widely known for treating those of modest means with the same respect as those with wealth and power.

History too shows the consequences of regimes that wished to redistribute the wealth of others and make denunciations about greed, especially wrapped within a materialistic, secular worldview. That was class warfare, too, and it ended in blood and wretched poverty.

Earlier this week on the Acton Institute Facebook page, Rev. Sirico’s archived article “What is Capitalism?” was posted and sparked a lively discussion between two people (click here to see our Facebook page and the discussion). This blog post is to serve as my response.

Your idea of communionism, at least from what I understand from your comments, bears some resemblances to communism which has the end goal of society or the community possessing property in common. This, however, doesn’t preserve human dignity properly; nor does not foster interdependence among people. Instead it creates a society dependent on a centralized government.

In his Summa Theologica, Thomas Aquinas explains some of the core the problems with common property. Like Aristotle, he notes, that individuals are better managers of property because it allows for a more orderly fashion of management, and as he states “human beings content with their own property live in a condition of peace. And so we observe that quarrels arise rather frequently among those who possess goods in common not individually.” The quarrels can arise because no individual is specifically responsible for the care of the common property. There is no person who feels like he or she has stake in the property. A direct result, and historical example, of common property is the tragedy of the commons.

In Capital Marx argues that there is no value in human labor per se. He states “human labour, creates value, but is not itself value. It becomes value only in its congealed state, when embodied in the form of some object.” This is contrary to Christian beliefs. There is intrinsic value in human labor itself. To work is a calling and a form of stewardship. In the encyclical Laborem Exercens, (“On Human Work”), Pope John Paul II explains how working is a direct expression of our human dignity. Such preservation of human dignity cannot be found in a system that devalues work.

The idea of property that you advocate is also found in Marx’s Capital and the Manifesto of the Communist Party. This idea is flawed on many levels. It doesn’t take into account that the entrepreneur purchases the raw goods that the workers use to make the end product. As a result, based on any definition of property, the entrepreneur is the sole owner of the raw goods and it is his or her private property, not the worker. The worker engages in a contract with the entrepreneur in an exchange of services. Just because the worker uses his or her services, which he or she is paid for by the entrepreneur, does not translate into the worker becoming the owner of the raw good which becomes the final product.

The idea of private property that you advocate, rescinding property rights for all corporations, is dangerous on many levels. It puts political rights, religious rights, and all private property rights in danger. Marx notes that the abolition of private property for the bourgeois leads to the abolition of family because, according to his argument, the family is rooted in property and private gain. Furthermore, Marx articulates that his beliefs, which bring forth a communist centralized system, also abolish religion.

In Federalist Paper No. 10 James Madison argues how the first object of any government is the protection of property. Furthermore, in Democracy in America Alexis de Tocqueville explains that what makes America successful is its protection of private property for all. No landed property class exists. He articulates how the protection of private property translates into the protection of political rights even to the least of all citizens. Furthermore the right to property fosters “…obedience to established law, of the influence of good mores in republics, and of the assistance that religious ideas lend to order and freedom…” What makes America special and successful, according to Tocqueville, is the protection of rights for all people. As Tocqueville demonstrates, the right of property needs to be protected because other rights stem from it. This right extends to even corporations. Rights should be guaranteed for all, not winners and losers picked by the government.

Again, private property should be protected at all levels, for both individuals and corporations. Hernando de Soto explains this in his book and in an essay both titled, The Mystery of Capital. Through examples found in his essay, book, and case studies (which can be found by clicking here), de Soto effectively argues using proven facts, statistics, and real world examples that the protection of capital and private property rights has led to economic prosperity in the west, whereas the lack of protection is a leading reason to the economic disparity in poor countries. If we fail to protect private property rights on all levels, then we begin down a path of economic decline. Without the protection of private property rights, and an effective legal structure to guarantee such protection, the wrong message is being sent to businesses. No business will want to invest in an economic climate that is hostile towards them.

A market system, which is what Rev. Sirico argues for in his article “What is Capitalism?” actually fosters virtues that all Christians value. This is articulated by Stephen Grabil in his essay “The Market, School of Virtue.” Here Grabil shows that greed is not what makes a free market churning, but instead it is virtue. Some of the virtues fostered in a free market are trustworthiness, self-control, sympathy, and fairness. Jay Richards, author of Money, Greed, and God: Why Capitalism Is the Solution and Not the Problem, demonstrates that greed is a vice which even Adam Smith condemned. Richards also shows why greed does not lead to a successful market economy, but actually destroys it.

In regards to the referenced Fulton Sheen article titled “New Slavery” it is important to note that the article was written in 1943 when many monopolies were present in the market. Acton has never believed in or supported crony capitalism. Monopolies do not allow competition which is bad for the consumer and the worker. Also, Sheen does not advocate for the end of private property in his article. Instead he says we have a right to private property and our use of it should be righteous “Possession [of property] has two faces, two aspects: we all have a right to private property, but this is accompanied by our responsibility for its righteous use.” As Sirico articulates in the posted article, when the market is structured successfully it is the consumer who has primary control and then next is the worker. This is because of competition. Monopoly capitalism comes when the government gets into bed with businesses, and essentially block new entrepreneurs and potential new competitors from entering into the market.

Free markets are not just about an economic system. It is something greater than economics, it is about freedom. The freedom to choose what to purchase, the freedom for the worker to find an employer and not be forced into employment with the state or a monopoly, and the freedom to hold property and have it protected, this freedom is what capitalism is about. Tocqueville saw this in his visit to America and correctly articulated how the protection of private property, in all levels, has led to the great freedom Americans enjoy. However, Tocqueville also recognized the need for virtuous men and women because he knew America cannot succeed, nor its structure of government without them. As he states, “There are no great men without virtue; without respect for rights, there is no great people: one can almost say that there is no society; for what is a union of rational and intelligent being among whom force is the sole bond?”

Writing for the Huffington Post, Shane Claiborne is also asking “What Would Jesus Cut?” I’m still opposed to the whole notion of reducing Christ to budget director, as my earlier post points out. But Jesus as Secretary of Defense of the United States or rather, Jesus as secretary of peace as proposed by Congressman Dennis Kucinich is equally unhelpful. Mark Tooley, president of IRD, has already weighed in on Shane Claiborne’s not so brilliant drafting of Jesus for president.

As a signer of “A Call for Intergenerational Justice,” one should assume Claiborne is serious about deficit reduction. We should take him at his word, but what about defense spending for deficit reduction and the proper role of government? And as John has already pointed out in his post, and what everybody should know, is that defense cuts alone will not balance the budget.

There are responsible conservative lawmakers, like U.S. Congressman Justin Amash from right here in West Michigan, that have rightfully said defense cuts should be on the table as part of plan for fiscal responsibility. In terms of the proper role of government, defense spending is a clear federal mandate for taxing and spending (Article 1, Section 8). The constitution should still be relevant, and one could assume we may not be in the same spending mess we are in right now if it was taken more seriously.

Claiborne says, “Even though the 533 billion dollar military budget is the elephant in the room and the gushing, bleeding wound of America’s deficit … it has been the sacred cow.”

This is what is unhelpful, and Mark Tooley has already pointed this out in his own response to “What Would Jesus Cut?”, that “probably Claiborne doesn’t know that ‘programs of social uplift’ have out expensed defense for 40 years, starting with the Nixon Administration.” Defense spending is 20 percent of the annual budget, while Medicare and Medicaid takes up 23 percent of the budget and social security is 20 percent as well, but tack on another 12 billion in annual dollars. Claiborne says “As Dr. [Martin L.] King said, ‘A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.” But this is clearly not the case as Clairborne just pulled out a pithy maxim without ever looking at any real numbers.

Tooley also makes a good point about Claiborne’s Anabaptist tradition as well:

Claiborne, an Anabaptist, is author of Jesus for President, a 2008 book describing government as the biblical Whore of Babylon. Oddly, many neo-Anabaptists ferociously denounce government as demonic, almost sounding Libertarian, while still demanding more and more government for politically correct social programs.

Claiborne believes America is the evil imperialist par excellence. But why is it then okay for God to ordain that same ‘evil’ state to fill the bellies of the masses and provide for their every social need through government fiat?

This brings up a good point about rhetoric versus reality. The nuclear freeze crowd of the 1980s hyperventilated across the United States and Western Europe with help from Moscow because Ronald Reagan was strengthening the NATO alliance by sending nuclear Pershing II missiles into Europe. Reagan’s efforts were disastrous for the Soviet Union, and the peace he achieved dwarfed the objectives of the same old arms agreements advocated by the nuclear freeze movement.

Perhaps, “A Call for Intergenerational Justice” would have been better served without the inclusion of such names as Jim Wallis and Claiborne. Serious matters call for a more serious discussion. I reviewed The Scandal of Evangelical Politics by Ronald Sider, who is also a signer of “A Call for Intergenerational Justice.” Still left of center, Sider praised market forces, saying, “On balance, a market economy respects human freedom better, creates wealth more efficiently, and tends to be better at reducing poverty.”

Claiborne can make no such statement. He seems to view the free-market as a construct of an evil imperialistic American empire. Markets seem only useful to him in the context of underpaid enlisted military men and women selling cookies to buy their uniforms. Claiborne may have something worthwhile to say every once in a while, his bio is interesting to say the least, but on budget matters and defense spending he’s clearly babbling.