Posts tagged with: Friedrich Hayek

Mako Fujimura, one of the artists hosted by the Acton Institute for ArtPrize 2014

Mako Fujimura, one of the artists hosted by the Acton Institute for ArtPrize 2014

Here in Grand Rapids, we are awaiting the beginning of ArtPrize (Sept. 24-Oct. 12.) For those of us who live or work in the city, we are seeing signs of it: posters hung in coffee shop windows, artists installing pieces, restaurants adding waitstaff, and venues getting spit-shined. It’s a big deal: in 2013, ArtPrize brought in 400,000+ visitors to this city, an estimated $22 million in net growth and hundreds of jobs. Not too shabby for an event that didn’t even exist a few short years ago.

The genesis of ArtPrize was the mind of Rick DeVos, a man focused on entrepreneurship and starting conversations. DeVos started ArtPrize not as a way to bring money to his hometown (“a happy accident“), but because:

…his forays into tech startups had made him love the democracy of the Internet and the possibilities afforded by crowdsourcing. Why not a contest with an open call for artists and an open vote? “I was always intrigued with the X-Prize model,” he said, referring to the $10 million prize offered for private-sector space flight. “This whole idea of putting a big prize out there and then putting as few rules around it as possible, not trying to dictate what the outcome should look like.” The idea expanded from there, and in 2009, five months after he first announced it, ArtPrize opened to the public.

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davebratIn a piece today for the NYT Magazine, economics reporter Binyamin Appelbaum examines David Brat’s fusion of faith and free-market economics. Appelbaum finds that mixture problematic, to say the least, but it’s hard to sort out whether it is the religious faith or the free-market sympathies that Appelbaum finds more troubling.

In the opening paragraph, Appelbaum asserts that before Brat’s rise to prominence “there was plenty of skepticism about whether he merited the label of academic economist.” Who these skeptics are, who knew so much about Brat “even before” his “out-of-nowhere” victory, we are simply left to ponder. It seems some of his colleagues at Randolph-Macon College now harbor such skepticism. (Brat is running against a Randolph-Macon sociologist, Jack Trammell. Brat once wrote that “Capitalism is the major organizing force in modern life, whether we like it or not. It is here to stay. If the sociologists ever grasp this basic fact, their enterprise will be much more fruitful.”)

Brat’s academic record is a wortwhile question to take up, and one that there has been a great deal of interest in following his primary victory. I, like many others, wanted to find out more, and went in search of Brat’s publications (with the help of one of our interns). I’ve had a chance to look at a few, and even turned up the paper on Ayn Rand that had gained such notice. The Rand paper turned out to be a co-authored piece with a student, and something which barely qualified as a poorly-edited introduction to a conference presentation. It is certainly not a smoking gun for tracking down Randian sympathies.

The problem with Appelbaum’s piece isn’t that he is asking questions about Brat’s academic record. These questions should be asked. The problem is the tone of Appelbaum’s inquisition and his presumption against the coherence of Brat’s position. The sarcasm oozes from Appelbaum’s prose: Brat “is certainly not in danger of winning a Nobel Prize.” Likewise Brat has written “discursive papers devoid of math,” “cited Wikipedia as a source,” and “never been published in a significant journal.”
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President Lyndon Johnson, Kentucky, 1964

President Lyndon Johnson, Kentucky, 1964

This year marks the 50th anniversary of Lyndon B. Johnson’s “War on Poverty.” Nicholas Eberstadt, an economist at the American Enterprise Institute, has published a monograph entitled, The Great Society: The Triumph and The Tragedy at Fifty. Eberstadt calls Johnson’s vision for the war on poverty “the most ambitious call to date” in American political history. At the time of Johnson’s speech unveiling this “Great Society,” the United States had only one nation-wide social program, Social Security. Johnson wanted more:

The Great Society proposed to reach even further: to bring about wholesale renewal of our cities, beautification of our natural surroundings, vitalization of our educational system. All this, and much more—and the solutions to the many questions encountered in this great endeavor, we were told, would assuredly be found, since this undertaking would “assemble the best thought and the broadest knowledge from all over the world to find those answers for America.

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EndersGameBookCoverMy conversion into a fan of science-fiction began with an unusual order from a member of the Joint Chiefs of Staff: “Each Marine shall read a minimum of three books from the [Commandant’s Professional Reading List] each year.”

Included on the list of books suitable for shaping the minds of young Lance Corporals like me were two sci-fi novels: Robert Heinlein’s Starship Troopers and Orson Scott Card’s Ender’s Game.

I soon discovered what lay hidden in these literary gems. Along with surprisingly intriguing story lines, both novels provide some keen insights on the role of training, discipline, and creativity in preparing an effective military. But Ender’s Game also included a concept that, at the time (1990), I would not have been able to classify: a Hayekian view of knowledge and liberty.

As Sam Staley says, the novel provides “lessons about individualism, liberty, and the value of markets.”
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In an excerpt from the splendid PovertyCure series, Michael Fairbanks offers a helpful bit on why our attitudes about competition matter for economic development:

I can predict the future of a developing nation better than any IMF team of economists by asking one question: “Do you believe in competition?” When I go to Venezuela and I say, “do you believe in competition?,” they say “competition means the rich get richer and the poor get poorer.” They say “competition is the unnecessary duplication of effort because you have two firms doing the same thing.” They say “competition is a quaint North American concept that doesn’t apply here.”

But when I go to Silicon Valley and I say,“What do you think about the word competition?,” they say, “Well, I love competition, because even when I lose, I learn something. And my success is due to the fact that I speeded up my failures, and the only way to fail was to compete, and figure out where I wasn’t good enough.”

As Hayek put it, competition is a discovery procedure. If we neglect, distort, or downplay that process, we can expect the outcomes of discovery — the fruits of our sacrifice and service — to digress accordingly.

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In his new book, Knowledge and Power, the imitable George Gilder aims at reframing our economic paradigm, focusing heavily on the tension between the power of the State and the knowledge of entrepreneurs — or, as William Easterly has put it, the planners and the searchers.

“Wealth is essentially knowledge,” Gilder writes, and “the war between the centrifuge of knowledge and the centripetal pull of power remains the prime conflict in all economies.”

In a recent interview with Peter Robinson, he fleshes out his thesis:

Quoting Albert Hirschman, Gilder notes that, “Creativity always comes as a surprise to us,” continuing (in his own words), “if it didn’t, we wouldn’t need it and planning would work….Entrepreneurial creativity is almost defined by its surprisal —  by its unexpected character.”

Making room for such surprise requires a dose of Hayekian humility, but as for the shapes, contours, and origins of the surprise itself, Christianity has plenty to say. (more…)

Blog author: jcarter
Thursday, October 10, 2013
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revelation_churches“When you read the Book of Revelation,” says Gregory Alan Thornbury, president of The King’s College, “it’s about not giving in to tyranny when it comes to economics. I don’t know why we don’t talk about that in church.” In an interview with Jerry Bowyer at Forbes, Thornbury expounds on how the revelation to St. John is a precursor to the idea that F. A. Hayek later would call “The Fatal Conceit.”

Jerry: Should a Christian be a Hayekian? Do you see overlap there?

Dr. Thornbury: I definitely see overlap for this reason: I think that when you study the texts of particularly the New Testament, although it has its origins in the Mosaic Law, I think what you see there is the seedbed of freedom of conscience. You see democratic religion in the pages of the New Testament. So whereas some people in Acts chapter 5 see some kind of nascent socialism, actually what you’re seeing is free people electing to gather together in solidarity around key principles and ideals and goals, and the people who joined in that were people like Lydia. There was a mercantile aspect to the early Christian movement. When I read Hayek and I see his argument for the link between private property and freedom, I see a direct line going all the way back to those pages of the New Testament, because what the Apostle Paul and others were representing was an alternative to totalitarianism. When you look at the Apostle John – and whatever else you think the Book of Revelation says about the future—what it definitely was, was the greatest political protest letter ever penned in the history of the world, because he was saying, “The state has no business telling us how we should govern our own life together.” And when I say “society” or “culture”, here’s how I’m defining that, Jerry: I take a nineteenth century definition by Johann Herder, who many recognize as the founding father of modern sociology. He said, “Culture is the lifeblood of a civilization. It’s the flow of moral energy that keeps a society intact.” So, when I see Hayek talking about making sure that we stay free of tyranny, I see the entailments of that going all the way back to the emperor and Domitian and the Apostle John.

Read more . . .

The Road to Serfdom- The Definitive Edition

The Road to Serfdom- The Definitive Edition

An unimpeachable classic work in political philosophy, intellectual and cultural history, and economics, The Road to Serfdom has inspired and infuriated politicians, scholars, and general readers for half a century. 

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Tyler Cowen has an interesting column in last Sunday’s New York Times, arguing that despite run-of-the-mill objections to “cold” and “heartless” economic analysis, economics is, as a science, “egalitarian at its core”:

Economic analysis is itself value-free, but in practice it encourages a cosmopolitan interest in natural equality. Many economic models, of course, assume that all individuals are motivated by rational self-interest or some variant thereof; even the so-called behavioral theories tweak only the fringes of a basically common, rational understanding of people. The crucial implication is this: If you treat all individuals as fundamentally the same in your theoretical constructs, it would be odd to insist that the law should suddenly start treating them differently.

James Poulos offers an healthy response, reminding us that “no matter how solid the economic foundation for moral egalitarianism, there’s a thing or two of great moral significance that’s missing.”

Indeed, in attempting to avoid the cliché of cold-heartedness, Cowen risks perpetuating a different one: that economists ignore the mystery and spiritual significance of humanity and human behavior. The instilling of egalitarian sensibilities when it comes to seeing people as people is one thing, but part of this reorientation needs to include a recognition of the features that make each us different. Leveling things is helpful when the earth is rocky, but the bigger problem for the modern economist seems to be his propensity to create craters in the pretty green grass. (more…)

“You can be for markets without being against redistribution,” says Erik Angner, a philosophy professor at George Mason University. Angner argues that the Nobel-winning economist Friedrich Hayek offers an alternative to contemporary liberals and leftists on the one hand and conservatives and libertarians on the other. As Amanda Winkler notes,

In a controversial Politco op-ed published in 2012, Angner wrote that while Britain’s National Health System and the price-rigging elements of Obamacare violate Hayekian principles, creating an individual mandate and giving poor Americans some amount of money to spend on health care as they see fit does not. To Angner, vouchers for health care would function similarly to vouchers for education, helping to create stronger market forces and spurring the sort of competition that would lead to a more efficient and robust system.

Economist Tyler Cowan is skeptical that Hayek’s approach would work since, he says, “it is hard to have major government involvement in health care without price controls, or should I write ‘price controls,’ in some manner or another.”

Perhaps more interesting than whether a Hayekian could support Obamacare is the question of whether a Christian who favors free markets should be in favor of income redistribution. Personally, for numerous reasons I’m in favor of encouraging individual redistribution and leery of state-mandated redistribution. One reason, as Arthur Brooks explains, is that “[It] just culturally makes it harder for people who believe in income redistribution to give intuitively, to take personal ownership of a problem.” Believing that aiding the poor is the role of the government provides a disincentive for personal engagement with those in need.

What would most Christians consider a strong, compelling argument (assuming any exist) for free markets and government-mandated redistribution?

Blog author: jballor
Thursday, January 24, 2013
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Life of Michael Angelo, 1912 - The Prophet JeremiahWhy do the wicked prosper? This plaintive query is a consistent cry from the psalmist and the prophets. As Jeremiah puts it, “Why does the way of the wicked prosper? Why do all the faithless live at ease?”

The concern in large part has to do with injustice; why do those who are so morally and spiritually bankrupt enjoy such great temporal blessings?

Over at the IEA blog, John Meadowcroft passes along an answer, at least insofar as it relates to the political structures of social democracy. Drawing on Friedrich Hayek, Geoffrey Brennan, and James Buchanan, Meadowcroft writes that “we should expect that the people most willing to work to attain political office will be those who expect to gain the most from holding it.” And it turns out that quite often those who stand to gain most from political office are those who, in the words of Brennan and Buchanan, “place higher values on the possession of such power.”

Meadowcroft concludes by invoking Hume’s “dictum that political institutions should be designed as if every person was a knave with no end other than his or her own private interests, even though we know that not all people behave knavishly.” The lesson for political power is that it ought to be limited such that the knaves who seek it for their own selfish ends (or those who are turned into knaves by the exercise of their power) ought to have their ambitions blunted by the constrained scope of their authority.

In the context of political power, the wicked tend to prosper, that is, they tend to become powerful precisely because it is so important to them to become powerful. The truth of this insight from public choice theory can also be applied more generally to the prophetic concern.

Why do the wicked prosper? The answer is in part, at least, because the wicked under examination here are the ones who are so attracted to material or temporal gain that they are willing do to pretty much anything to get it. They often achieve their goals, and thus prosper in this limited sense for a season. But in enabling them to achieve what they so desire, God allows their desire to become its own judgment.

A corollary to all this is that there is an obligation on the part of the church and other morally-formative institutions to do their best within their mandates to encourage and promote the development of those who might seek to exercise authority (whether political or otherwise), not as selfish knaves but as suffering servants. Since there are no systems or structures that are incorruptible, it is perhaps just as important to develop non-knavish leaders as it is to limit the scope of any particular leader’s power.