Posts tagged with: free markets

If you weren’t able to join us in person for the inaugural lecture of the 2011 Acton Lecture Series, fear not: today, we’re pleased to present Rev. Robert A. Sirico’s “Christian Poverty in the Age of Prosperity” for our loyal PowerBlog readers.  The lecture was delivered on February 3rd at the Waters Building here in Grand Rapids, Michigan.

The next lecture in the 2011 Acton Lecture Series takes place on March 16 and features Peter Greer, President of HOPE International.  If you’re interested in attending, click here to register.

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:

Blog author: mvandermaas
posted by on Thursday, November 4, 2010

Hayek and Keynes are dropping beats again – this time live! If you haven’t seen the original, check it out here.

Blog author: kjayabalan
posted by on Wednesday, September 1, 2010

Forgive the blunt title of this blog post, but the point needs to be made in no uncertain terms.

The Zenit News Agency has interviewed John Medaille, author of Toward a Truly Free Market: A Distributist Perspective on the Role of Government, Taxes, Health Care, Deficits, and More, which calls for a direct if brief (more later, perhaps – I have yet to read the book) response from this Catholic defender of the market economy.

Whether or not Pope Benedict’s Caritas in Veritate is a boon to “alternative economics” as the Zenit interviewer claims, the market economy has come under attack from just about every corner since the global financial crisis of 2008. It’s easy enough to kick a system when it’s down, even when there’s plenty of blame to go around. Some critics, however, have been suffering through many decades of capitalist triumphalism to get their revenge. Among these are the distributists.

As I’ve noted in some recent blog posts, distributism has its origin in the writings of G.K. Chesterton and Hilaire Belloc who, for the brilliant Catholic apologists they were, seem to have known very little about economics. As the Zenit interviewer remarks, “many are skeptical, and believe distributism is simply romantic agrarianism, or worse, just an aesthetic sensibility, without any real practical solutions.”

Identified as a “neo-distributist,” Medaille wants to make up for the deficiencies of his fathers. He takes economics more seriously and argues that distributism is the “truly” free-market system compared to capitalism or socialism, though it should be remembered that Chesterton and Belloc also supported distributism in the name of economic liberty, private property and less interference from the state. Be that as it may. The question is ultimately whether distributism, neo- or paleo-, lives up to its claims as an “alternative” or “third-way.”

Medaille starts by critiquing the related notions that economics is a physical, rather than a human, science and that economics has nothing to do with ethics, especially justice. I don’t know who he is debating here. When I studied economics as an undergrad at a large secular university and worked as an international economist for the U.S. government, I may have come across such types, though no one was so brash to say that ethics didn’t matter. But it definitely does not describe those of us who appreciate Austrian economics and promote a Catholic understanding of the market economy.

More to the point, the question is how economics as a human science is to “practice” justice. How exactly can an economic system ensure justice between a buyer and a seller who come to a common agreement? Doesn’t the virtue of justice require just persons? And isn’t legal justice the purview of the state that legislates against force, fraud, theft, etc.?

For an example, Medaille says that, in matters of trade, foreign financing of domestic consumption is impoverishing to both parties and presumably unjust. While I could be convinced of its imprudence or undesirability in certain situations, I fail to see why or how such financing is always and everywhere unjust and therefore deserving of a blanket condemnation.

Medaille then states his case for distributism as the truly free-market system compared to capitalism and socialism. He makes the obvious point that any system that concentrates power is bound to leave individuals worse off and less free. Socialism is clearly guilty as charged but does capitalism necessarily lead to greater concentrations of economic power? The problem of concentrated power mainly occurs when corporations and the state work together – a.k.a. corporatism – which hardly describes a market economy worth defending and may even resemble the distributist model.

A truly free-market economy must allow free competition; it is only when capitalists collude to restrict competition that power is concentrated and freedom restricted. Yet this is precisely what guilds seek to do. Or have the neo-distributists distanced themselves from Chesterton and Belloc’s defense of guilds and critique of competition and advertising? I cannot tell.

Medaille is on firmer ground when he reminds us that the government should be doing less and that government interference often leads to the concentration of power. But he then ruins his case by looking to the state and trade associations to collude, which seems to be acceptable so long as it all happens at a local level.

Medaille explicitly proposes using tax policy, property law, licensing authorities and other political means to the advantage of some over others. But how is local government somehow exempt from draconian or overly restrictive interference? In fact, the history of republican government is full of such examples, especially in cases where an obstinate minority asserts its rights against the majority. The concentration of power often begins “small”, “locally” or “popularly” and grows from there; see Hayek’s The Road to Serfdom for a well-known demonstration of the phenomenon.

In the end, I am left wondering just what the distributists think is so good about economic freedom. As far as I can tell, it is not about using our God-given skills and talents through the division of labor for the benefit of all, and I see absolutely no mention of poverty reduction, longer life expectancies, medical and technological advances, the social virtues encouraged by commerce, and other goods brought about by economic freedom. The distributist vision of economic liberty and private property seems to feed a misguided notion of self-sufficiency and pride that is as antithetical to Catholic social teaching as materialism and consumerism.

Furthermore, the neo-distributist case for free markets is riddled with the same contradictions and problems that plagued its predecessor. Making the case against socialism and a mythical laissez-faire state of affairs is simply not good enough these days. Instead of urging serious Catholics and others who take ethics seriously to seek new economic models or “lifestyles,” why not encourage them to understand how markets work and what moral freedom and responsibility require from us as citizens and in the marketplace?

Blog author: mvandermaas
posted by on Thursday, March 11, 2010

Nicolae Ceausescu with his wife Elena

Nicolae Ceausescu with his wife Elena

It is a good thing from time to time to step back and remember just what it is that we who believe in the free society fight for each day. I stumbled across Michael Totten’s exploration of Romania – Twenty Years After the Fall of the Tyrant. With the passage of time, it is easy to forget – at least for those of us who never directly experienced it – just how suffocating and cruel the Communist dictatorships of the 20th century were.

“Communism changed our mentality,” said Daniel Apostol, editor in chief of Romania’s Money Channel. “We are still fighting now to come back to what we were. We lost the culture of private property. We lost this sense of privacy and respecting each other’s time and respecting people as individuals, as human beings. That was the worst thing that happened to us. This is why we are struggling so much now to get back to the capitalist society, to the free market, which can run only if there is respect for private property…”

Totten details the continuing consequences of totalitarian rule in Romania, and the country’s struggle to rebuild itself. All in all, a fine reminder to all of us who experience the blessings of liberty to never take those blessings – or the systems that were built to protect and preserve them – for granted.

See also: The Architect as Totalitarian by Theodore Dalrymple

It’s not too late to order The Call of the Entrepreneur and The Birth of Freedom for stocking stuffers. An eye-opening report by Patrick Courrielche at Big Hollywood makes for a fine motivator. Some excerpts:

Enter Howard Zinn – an author, professor and American historian – who, with the help of Hollywood and the History Channel, intends to change the way our pre-K through high school children learn American history [beginning with "a new documentary, entitled The People Speak, to be aired December 13th at 8pm on the History Channel.”]. …

Zinn has spent a lifetime teaching college students about the evils of capitalism, the promise of Marxism, and his version of American history – a history that has, in his view, been kept from students. …

Perhaps due to their one-sided perspective of America’s past, Zinn’s history books have largely been limited to colleges and universities, until now. In the press release announcing the broadcast, HISTORY introduced a partnership with VOICES Of A People’s History Of The United States, a nonprofit led by Zinn that bares the same name as his companion book, to help get his special brand of history into classrooms. …

Brian Jones, a New York teacher and actor, is a board member of VOICES and has also played the lead in Zinn’s play Marx in SoHo. … he extols the benefits of this one man play as a tool to introduce people to Marx’s ideas….

Jones is also a regular contributor to Socialist Worker, International Socialist Review, and speaks regularly on the beneficial principles of Marxism, including this year at the 2009 Socialism Conference. He recently gave a speech on the failure of capitalism, proclaiming that “Marx is back.”

Sarah Knopp, a Los Angeles high school teacher, is also on Zinn’s Teacher Advisory Board. Like Jones, Knopp is also a regular contributor to International Socialist Review, Socialist Worker, is an active member in The International Socialist Organization, and was also a speaker at the 2009 Socialist Conference. …

Then there is Jesse Sharkey, a schoolteacher in Chicago. Sharkey is another of Zinn’s Teacher Advisory Board Members and … a contributor to— Socialist Worker.

This is the group that the History Channel is working with “to develop enhanced, co-branded curriculums for a countrywide educational initiative.” …

I am not advocating that we spare our kids the harsh truths of American history, but I am suggesting, given Zinn’s far-left political affiliation, this project is designed to breakdown our vulnerable children’s views of American principles so that they can be built back up in a socialist vision. …

It is not surprising to me that there are groups sympathetic to Marx’s ideas throughout our country. What is surprising is that the most powerful persuasion machine in the world (Hollywood) and the History Channel would provide Zinn such a prominent soapbox to stealthily build a case for a destructive ideology to our children, and as a result mainstream his ideas with the magic of cool music, graphics, and celebrity. Groups that push Marx’s philosophy are like a virtual organism that will not die off even when stung by the undeniable historical evidence showing human behavior makes such a system unsustainable. If we let this virtual organism into our grade schools, it will take decades for our kids to unlearn the ideology.

… When a reporter asked Zinn, “In writing A People’s History, what were you calling for? A quiet revolution?” Zinn responded: “A quiet revolution is a good way of putting it. From the bottom up. Not a revolution in the classical sense of a seizure of power, but rather from people beginning to take power from within the institutions. In the workplace, the workers would take power to control the conditions of their lives. It would be a democratic socialism.”

Counter bad documentaries with good ones. And if you want to do more at this gift-giving time of the year, consider helping the Acton Institute in its ongoing struggle to promote the free and virtuous society.

Blog author: jwitt
posted by on Wednesday, November 25, 2009

Got the socialism blues? Worried that a friend or maybe a teenage son or daughter may contract a nasty case of it? Marvin Olasky at World magazine recommends former Acton research fellow Jay Richards’ 2009 HarperOne book, Money Greed and God: Why Capitalism Is the Solution and not the Problem:

Among the myths Richards demolishes: The Nirvana Myth (contrasting capitalism with an unrealizable ideal rather than with its real alternatives), the Piety Myth (focusing on good intentions rather than results), and the Materialist and Zero-Sum Game Myths (believing that wealth is not created but simply transferred).

Richards, one of that rare breed with a theology doctorate but an understanding of economics, also points out the errors of the Greed Myth (believing that the essence of capitalism is greed), the Usury Myth (that charging interest on money is immoral), and the Freeze-Frame Myth (that what’s happening now regarding population, income, natural resources, or so on, will always happen).

Want to administer some of the immunizations in delicious DVD form? Try a high-quality, narrative-driven Acton documentary that was irenic enough to air on scores of PBS stations around the country but with enough red meat to also air on Fox Business: The Call of the Entrepreneur shows why entrepreneurs and capitalism are part of the solution, and why socialism delivers the opposite of what it promises. The story of Jimmy Lai–the boy who escaped Communist China, founded a media empire, and confronted the Chinese leaders behind the Tiananmen Square Massacre–is alone worth the price of admission.

How do we restore confidence in free markets? Formulate a robust explanation of their moral value. Read Economic Liberalism and its Discontents on Public Discourse.

In his recent book The Creation and Destruction of Value, Princeton University’s Harold James observes that the 2008 financial crisis resulted in more than the devastation of economic value. It also facilitated a collapse of values in the sense of people’s faith in particular ideas, institutions, and practices. Among these, few would question that economic Liberalism’s credibility was significantly undermined.

As time passes, more people may recognize that the financial crisis owed much to factors that had little to do with markets as such. As several scholars illustrated in the 2009 monograph Verdict on the Crash, the causes included regulations that encouraged irresponsible behavior by banks, imprudent central bank policies, not to mention outright collusion between politicians and government-sponsored enterprises such as Fannie Mae and Freddie Mac.

Unfortunately for promoters of free markets, knowledge of these facts will take time to counter the widespread perception that economic liberalism—manifested in financial liberalization, privatization, deregulation, and increased competition—contributed significantly to the 2008 crisis.

In the meantime, those committed to economic liberalism have a chance to rethink and reformulate the case for markets. Certainly the efficiency arguments for economic freedom will be revisited, refined, and rearticulated. But it’s also an opportunity for economic liberals to reexamine what is often a weakness in their position—the principled case for markets.

Kishore Jayabalan, director of Istituto Acton (the Acton Institute’s Rome office), was interviewed by Vatican Radio concerning the authentic human development concerns of the whole person, which is a topic discussed in Caritas in Veritate. Jayabalan discussed how development schemes throughout the world should look at the aspirations of each individual person.  Furthermore, in Caritas in Veritate there is a mention of a “breathing space” used a few times in the encyclical.  This breathing space aspect means developing a vibrant and diverse society and not allowing central planning to decide every aspect of a person’s life; it is also important to place the individual at the center of the development.

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Samuel Gregg, Director of Research at the Acton Institute, was interviewed on Ave Maria Radio.  Gregg discusses Caritas in Veritate while addressing many issues that have risen from the encyclical.  Gregg explains that the encyclical is not a conservative or liberal document, but rather it is simply Catholic.  People should not read it through the eyes of secular political categories; importantly, when reading Caritas in Veritate, we must not think in secular terms on issues such as the free market and redistribution of wealth.  Gregg also makes a point to mention Caritas in Veritate does not say markets are evil.  Markets are good, but we must make sure they are grounded in morals — this is what makes a market good and successful.

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In a Forbes blog post titled “Failure of Morality, Not Capitalism,” Rich Kaarlgard counters the critics of supply-side capitalism by pointing to an absence of morality. Kaarlgard declares:

Many people do blame capitalism for bringing us to this low moment in the economy. Do they have a point?

They do if capitalism, as they define it, is devoid of any underlying morality. True enough, it is hard to see any underlying morality when one surveys the present carnage caused by liar loans, shady banks, duplicitous politicians, Ponzi schemers and regulators angling for Wall Street jobs.

Kaarlgard concludes by noting the importance of returning to a free enterprise system with a moral framework, saying, “Every alternative you can imagine is much worse.” He also offers a video version of the post.