Posts tagged with: Friedrich Hayek

“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.

In the Washington Times, Nile Gardiner praises Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future, the new book by Acton Research Director Samuel Gregg. Gardiner, the director of the Margaret Thatcher Center for Freedom at The Heritage Foundation and a Washington-based foreign affairs analyst for The Telegraph, says Becoming Europe “should be on the desk of every member of the House and Senate who cares about the future of America as a prosperous and free nation.” Gardiner recommends the book for its “rich detail describing the economic and social ‘Europeanization’ of America, from the rise of vast welfare systems to growing skepticism of the merits of the free-enterprise system.” Excerpt from the review:

“Becoming Europe” is a meticulously researched and well-argued thesis that lays out what is at stake for the world’s superpower, as it faces a stark choice between European-style decline or a return to the original vision of America’s Founding Fathers, as well as the classical liberal teachings of Alexis de Tocqueville, Friedrich von Hayek and Adam Smith. Mr. Gregg, who is director of research at the Acton Institute, paints a grim picture of the direction America is taking but, nevertheless, conveys a positive message to his readers. Mr. Gregg argues that while America is indeed on the path to the European model, it can still turn back and avoid the fate that Europe looks doomed to suffer. In many respects, this is an optimistic book based upon faith in America’s ability to renew itself through rediscovering the principles of economic liberty.

I agree with Mr. Gregg’s assessment. As Gallup polling consistently shows, America is still at its core a conservative nation, one that cherishes the foundations of individual liberty. The fire of freedom still burns brighter on this side of the Atlantic than it does in the Old World, where the suffocating supranationalism of the European Union marches on, with the EU heading toward ever-greater political and economic centralization. The European nightmare can be avoided here, however, only if America’s leaders, at both a national and state level, are willing to stand up for economic freedom and reject the destructive ideology of big government. Washington is already on the path to Brussels, Paris and Athens, but it still has an opportunity to reverse course and avoid the road to economic ruin.

Read Nile Gardiner’s full review of Becoming Europe in the Washington Times.

Bono, foreign aid, development, capitalismBono, lead singer of U2 and co-founder of charity-group ONE, recently offered some positive words about the role of markets in reducing global poverty and spurring economic development (HT):

The Irish singer and co-founder of ONE, a campaigning group that fights poverty and disease in Africa, said it had been “a humbling thing for me” to realize the importance of capitalism and entrepreneurialism in philanthropy, particularly as someone who “got into this as a righteous anger activist with all the cliches.”

“Job creators and innovators are just the key, and aid is just a bridge,” he told an audience of 200 leading technology entrepreneurs and investors at the F.ounders tech conference in Dublin. “We see it as startup money, investment in new countries. A humbling thing was to learn the role of commerce.”

The remarks have led to relative hype in “pro-market” circles, but I’d remind folks that these are brief statements made to a small group of innovators and entrepreneurs. ONE has plenty of wrinkles in its past, and Bono’s primary legacy in this arena consists of promoting the types of ineffective, top-down social engineering that groups like PovertyCure seek to expose. When Bono continues to claim that foreign aid, as he understands it, is still a “bridge”—even if just a bridge—it’s reasonable to assume that his orientation toward “bridge-building” has been left largely unchanged by his newfound appreciation for markets.

But although I’m not overly confident that Bono’s sudden self-awareness is enough to radically shift his aid efforts away from fostering dependency, this small admission helps illuminate one of our key obstacles to doing good in the world: overzealousness paired with overconfidence.
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Blog author: jcarter
Thursday, October 11, 2012
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C.S. Lewis may not have written specifically about economics, but as Harold B. Jones Jr. explains, there’s reason to consider him a defender of the free market:

. . . C. S. Lewis had much in common with the great free-market thinkers of his time. He is discovered on careful examination to have been writing about many of the same issues as Ludwig von Mises and Friedrich Hayek and on these issues to have been in perfect agreement with them. The dates are worth considering. Bureaucracy, one of Mises’s critiques of governmental economic intervention, came out in 1944. Hayek’s The Road to Serfdom came out the same year. Lewis had released The Abolition of Man only a year before, and in the year that followed his That Hideous Strength made its debut. All these books were written to defend the idea of the individual human being as the locus of rational choice and moral responsibility. Mises and Hayek wrote as economists and Lewis as a lay theologian, but all three wrote to challenge the assault on human nature in the name of a false ideal.

Read more . . .

As noted already at the PowerBlog today, Sam Gregg has a fine piece on the complex relationship between law and morality, or constitutions and culture, over at Public Discourse.

As a follow-up (read the piece first), I’d like to point to an interesting aspect of James Buchanan’s advocacy of a balanced-budget amendment. As Gregg notes, Buchanan is an example of someone who thought that “America’s constitution required amending to bestow genuine independence upon a monetary authority,” or advocated for the “constitutionalization” of money. A related effort would be Buchanan’s efforts in support of a balanced-budget amendment to the American Constitution, as explored by James Alvey in his piece, “James M. Buchanan on the Ethics of Public Debt and Default.”
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On Public Discourse, Acton Research Director Samuel Gregg addresses the “considerable fractures” that continue to divide conservative and libertarian positions on significant policy issues as well as on “deeper philosophical questions.” He pulls apart the “often tortuously drawn distinctions” surrounding the political labels and then offers some reasons why the “often unconscious but sometimes deliberate embrace of philosophical skepticism by some conservatives and libertarians should be challenged.”

Perceptive critics of skepticism have illustrated that the concern to be reasonable and avoid self-deception about reality is the starting point of any quest for philosophical truth: i.e., the very knowledge that skeptics believe we can’t know. What reason could skeptics therefore have for desiring to comprehend that, in the final analysis, all is unknowable, unless they are engaged in a quest for truth? In other words, skeptics draw their deduction that we should be philosophical skeptics from foundational assumptions they cannot doubt.

Also self-refuting is the common skeptic claim that reason is purely instrumental. For to defend this position, the skeptic’s reason necessarily engages in a non-instrumental task. He presumes it is good to know the truth of skepticism, and on grounds of reason rather than feelings. It is thus inconsistent for skeptics to assert that all philosophical viewpoints are arbitrary opinions. When skeptics posit that humans can only be motivated by sentiment rather than reason, they are not proposing this statement as their own impetuous preference. They claim to be making a rational judgment.

Read “Beyond Conservatism and Libertarianism” on Public Discourse by Samuel Gregg.

Blog author: jwitt
Wednesday, December 21, 2011
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My recent piece in The American Spectator took the left to task for its misuse of the terms justice and social justice. The piece was more than a debate over semantics. In it I noted that Sojourners and its CEO, Jim Wallis, continue to promote well-intended but failed strategies that actually hurt the social and economic well-being of poor communities. I also called on everyone with a heart for the poor to set aside a top-down model of charity that “has trapped so many humans in a vicious cycle of paternalism and dependency” and instead to focus “on cultivating political and economic freedom for the world’s poor.” Sojourners’ Tim King responded here and then emailed me to ask for my thoughts on his response. I’ll start by emphasizing a few areas of agreement, adding a caveat here and there so as not to overstate the areas of overlap, and then I’ll move on to some areas of difference.

First, it’s a matter of record that politicians and other opinion leaders from both major U.S. parties have supported various forms of government-directed charity over the past several decades. Tim King is completely justified in pointing this out, and it’s important to recognize this state of affairs, since it reminds us that transforming the way we do charity won’t occur simply by voting one party out of power. Substantive change will require cultural transformation.

A second area of agreement is that, yes, there is such a thing as smart aid. PovertyCure has a good discussion of smart aid versus damaging aid here, as well as a page here on the good, the bad and the ugly in efforts to fight malaria. And in this Acton Commentary, Jennifer Roback Morse discusses some of the lessons learned in the battle against AIDS in Africa.

Third, Tim King’s blog post gives the reader the impression that that I consigned all uses of the term “social justice” to everlasting perdition, or that I want to ban the use of adjectives from the English language or something. My position is actually a bit more nuanced than this. In my article I noted that the term social justice has “a justifiable raison d’être,” “stretches back to 19th century Catholic social thought” and “was used in the context of nuanced explorations of law, ethics, and justice.” I didn’t have space to elaborate on this in the Spectator article, so I pointed to additional resources in this follow-up blog post.

King went on to say that the adjective social in social justice “highlights that justice deals with systems and structures within a society, not just with individual people. Justice can occur through the punishment of a single person for wrongdoing, but also through ending slavery or apartheid.” Absolutely. Justice deals with those things, a point I underscored in my article.

The thing is, though, that’s not how the religious left generally uses the term social justice, a reality that Tim King himself demonstrated by immediately pointing to the Circle of Protection statement as an embodiment of social justice principles. The statement is about preserving top-down government spending programs on behalf of the poor.

Another way to see how ordinary justice is being leeched out of Sojourners’ brand of social justice is to look at its official position on abortion. On the organization’s Issues page, under “What is Your Position on Abortion?” Sojourners emphasizes that “All life is a sacred gift from God, and public policies should reflect a consistent ethic of life.” Sounds like justice, plain and simple. But then look at their specific recommendations for how to protect the sacred gift of unborn human life:

Policy
Dramatically reduce abortion. Our society should support common ground policies that dramatically reduce the abortion rate by preventing unwanted pregnancies, providing meaningful alternatives and necessary supports for women and children, and reforming adoption laws.

Notice what’s missing from the list: A call to extend the most basic human right to unborn babies by making it illegal to kill them. What’s missing, in other words, is a call to extend ordinary justice to the unborn. In its place is a call to prevent “unwanted pregnancies” and to create attractive alternatives to killing unborn babies.

Sojourners and its leader say that laws against abortion are unattainable and ineffectual. But these laws wouldn’t be unattainable if the religious left joined religious conservatives in the fight to extend the right to life to the unborn. And as for ineffectual, University of Alabama professor Michael New studied the question and came to a very different conclusion in State Politics and Policy Quarterly. Here’s how he summarized his findings:

Planned Parenthood and many groups on the Catholic Left often argue that pro-life laws are ineffective. They claim that contraception spending and more generous welfare benefits are the best ways to reduce abortion rates. In reality, however, there is virtually no peer reviewed research, analyzing actual abortion data, which finds that more spending on either contraception or welfare has any effect on the incidence of abortion.

Conversely, this study adds to the sizable body of peer reviewed research which finds that legal protections for the unborn are effective at lowering abortion rates …

The study is now part of a substantial body of academic literature showing that such laws are effective in cutting abortions — and back up the anecdotal evidence seen in states like Mississippi, Michigan, South Carolina, Missouri and others where abortions have been cut by half from their previous highs thanks to the passage of several pro-life measures limiting abortions.

What Sojourners and many others on the left support for the unborn is more of their ineffective brand of redistributionist “social justice,” and never mind about the most basic form of justice for the unborn — a right to life protected by the law.

I’ll close by calling attention to one other thing in Tim King’s response, and that is Sojourners’ whole post-partisan meme. It’s a little surreal that they keep trotting this dog out after the George Soros funding fiasco. As my old colleague Jay Richards and others have reported, Sojourners had already received significant funding from the ultra-liberal, ultra-secular George Soros when Jim Wallis denied it in a public interview, going so far as to answer the charge by saying that World magazine editor and Acton senior fellow Marvin Olasky “lies for a living.” Then it came out that Sojourners has in fact received major funding from Soros, along with major funding from a who’s who list of left and ultra-leftwing organizations.

Sojourners keeps trying to hunt with the “we’re deep, not left” meme, but the dog won’t hunt anymore. A better approach would be to simply identify themselves as members of the religious left and forthrightly make a case for the specifics of their position. An even better approach would be to rethink that position from top to bottom, looking not at just the immediate and obvious effects of various government wealth transfers, but also at those long-term effects that are less obvious and often destructive.

In the mean time, if you are looking for a clear alternative to A Circle of Protection, one that emphasizes the dignity and creative capacity of the poor and the role of Christian worldview in promoting human flourishing, take a look at PovertyCure’s Statement of Principles or PovertyCure’s Facebook page. To sign a letter that directly answers the Circle of Protection, go here to Christians for a Sustainable Economy.

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.

Friedrich Hayek called it a weasel word. The American Spectator has my new essay on it here.

More on social justice as it appears in Catholic social teaching here. And more on social business here.