Posts tagged with: markets & morality

Blog author: sgrabill
Thursday, November 5, 2009

This week’s Acton Commentary:

Does the market inspire people to greater practical virtue, or does it eviscerate what little virtue any of us have?

Far from draining moral goodness out of us—as many think—the free market serves as a “school of the practical virtues.” Rather than elevating greed and self-sufficiency, the market fosters interdependence and cooperation. Its rewards do not go to those who are the most isolated, self-absorbed, or cut off from society, but to those who sustain mutually prosperous relationships with others.

Adam Smith made a striking observation more than two hundred years ago in his treatise, The Theory of Moral Sentiments. In a commercial society, he wrote, “every man becomes in some sense a merchant.” If Smith is right, what does that imply for the development of character in society? Is the market economy more likely to produce a Bernie Madoff or a Dave Ramsey? Does the market tend to erode character traits such as honesty, loyalty, courage, and the responsible stewardship of resources? (more…)

Blog author: jcouretas
Wednesday, September 23, 2009

David L. Bahnsen, a good friend of Acton, has begun a series of reviews of books on the financial crisis. No doubt, he’ll have many to review in the months ahead.

Here’s from Bahnsen’s latest, a review of Greenspan’s Bubbles by William Fleckinstein:

When someone in the position of authority and reputation as the chief central banker of the world decides to preach the new paradigm of eternal productivity, he encourages others to join particular sides of trades that may be wholly inappropriate. That influence is not welcome. Greenspan has done a lot to tarnish his legacy, but I believe the “age of bubbles” Greenspan reigned over should be known as the era in which the Federal Reserve chairman decided to take on the role of economic deity in our society. He was not good at it, because it was not his proper role. Our markets function better without central bankers playing the role of cheerleaders.

Bahnsen, a financial planner and investment manager, serves on the Blackstone Faculty of the Alliance Defense Fund, and is a Cooperating Board member of the Center for Cultural Leadership, where he is the Senior Fellow of Economics and Finance.

David describes himself as …

a disciple of Milton Friedman, a lover of Ronald Reagan, and a “National Review kind of conservative.” His writings strive to reflect an ideology of freedom principles integrated with transcendent truths. His hero is his late father, Dr. Greg Bahnsen, but he is pretty fond of John Calvin, Abraham Kuyper, F.A. Hayek, Winston Churchill, C.S. Lewis, William Buckley, Margaret Thatcher, George Gilder, Steve Forbes, and Larry Kudlow as well. When he is not being so serious, he also admires Tiger Woods and Pete Carroll.

Also, take a look at his musings on “Marketplace & Calling.”

We welcome a new contributor to the Acton Commentary crew: Dr. Dwight R. Lee, the William J. O’Neil Endowed Chair in Global Markets and Freedom at Southern Methodist University. In this week’s commentary, Lee discusses how the social objectives of clergy and economists are remarkably similar, even though their “windows on the world” suggest different approaches to achieving the shared aim of building a better, more humane society. This week’s commentary is adapted from an article to be published in the Journal of Markets & Morality (Vol. 12, No. 2; Fall 2009). Excerpt:

My hope is that members of the clergy, in their desire to achieve a better world, will begin to see economists as allies instead of adversaries. This hope may be dismissed as preposterous by some since, as an economist, I argue that market incentives are the most effective way of achieving many of the social outcomes most of the clergy favor. But those most opposed to market incentives for achieving desirable objectives have the most to gain by taking a look through the economic window. Much of the skepticism, indeed hostility, towards markets is based on distorted and mistaken views of how markets operate and what they accomplish.

Religious differences notwithstanding, most people respect the clergy for their noble objectives and effort to achieve those objectives by encouraging and celebrating “the better angels of our nature” mentioned in Abraham Lincoln’s first inaugural address. Most approve of the clergy’s concern with encouraging behavior such as sharing with, and serving the interests of, others; helping the poor; sacrificing for the good of the wider community; acting as good stewards of the earth’s resources; being concerned with protecting the environment; and generally living a life that promotes social cooperation and harmony.

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In today’s Detroit News, Acton Research Director Samuel Gregg talks about the sort of “moral, legal and political environment” that must exist if entrepreneurs are to flourish. He applies these precepts to the very serious economic problems in Michigan, where Acton is located:

… in the midst of this enthusiasm about entrepreneurship, we risk forgetting that entrepreneurship’s capacity to create wealth is heavily determined by the environments in which we live. In many business schools, it’s possible to study entrepreneurship without any reference being made to the role played by factors such as rule of law, property rights and low taxes in stimulating wealth-creating entrepreneurship.

Entrepreneurs gravitate to places where conditions for starting a business are optimal and the infrastructure — financial, legal, and technical — supports new businesses. Here, Michigan has a double-barreled problem: the out-migration of Michigan job seekers — much of it compelled by the steep decline of the auto sector in recent years — and the college graduate “brain drain” from state universities. How many of these people saying goodbye to Michigan are taking their entrepreneurial dreams, and maybe the next Big Thing in the economy, with them?

Read “Entrepreneurs Require More Room to Survive.” An extended version of this essay is slated to run in tomorrow’s Acton News & Commentary. Sign up online for this free email newsletter here.

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.

Blog author: jcouretas
Tuesday, January 22, 2008

Over at the blog, editor Chris Banescu had an entertaining exchange in the comment boxes with a writer who asserted that “capitalism can be just as infected with materialism and the concomitant need to tyrannize as communism.”

Here is Chris’ response:

Capitalism is really not an ideology. It simply describes reality, like mathematics and economics describe reality. It’s a word that explains how free human beings interact voluntarily with one another to exchange value and how they invest the excess of the fruits of their labors to produce more or gain more value. It is value and morally neutral.

You are positing your argument from the Marxist and leftist ideological point of view that made up this bogeyman they called “capitalism” as if it was some alien force dreamed up by rich to oppress the poor. That is a lie. You should know better than that.

On the other hand you are right that materialism is a moral failure, but that is the fault of the moral choice of individuals and groups, not the fault of capitalism. That’s like saying that it’s the fault of mathematics when someone does a wrong addition or multiplication, or the fault of accounting when someone embezzles money from their employer and writes down the incorrect cash register total.

When man deposits his money in a bank and requires interest payments, he is practicing capitalism!

When he buys food, clothing, furniture, medicine, etc.. from someone who produced it, he is practicing capitalism!

When he expects to be paid a fair salary for the work that he’s doing, he is practicing capitalism!

When he is the beneficiary of any retirement or pension fund, he is practicing capitalism!

When he buys property and hopes value will increase, he is practicing capitalism!

When he lends money to someone else and wants interest in return, he is practicing capitalism!

When he invents something new and unique and wants to sell it to someone else for a profit, he is practicing capitalism!

When he is the beneficiary of any government program providing social assistance, he directly benefits from others who practiced capitalism and created the profits the gov’t can now use and distribute to those in need!

When Churches and Synagogues get donations from people who first had to work and earn it, they are the beneficiaries of capitalism.

Even communists and socialists rely on capitalism to actually produce anything of value and generate the value and returns that fund and fuel their governments.

Rev. Robert A. Sirico is interviewed by James Freeman, assistant editor of the Wall Street Journal’s editorial page, about markets and morality and about the Acton Institute’s Call of the Entrepreneur documentary.