The Fraser Institute has released the tenth edition of their annual report on economic freedom in North America. The report considers how such factors as size of government, takings and discriminatory taxation, and labor market freedom affect people’s freedom to choose how to produce, sell, and use their own resources, while respecting others’ rights to do the same. Read the report below to see where your state ranks.
John Horvat II, author of Return to Order, recently interviewed Acton’s Director of Research, Samuel Gregg, about a variety of topics, including: Gregg’s interest in economics, Becoming Europe, Thomas Piketty and his controversial Capital in the Twenty-First Century, St. Thomas Aquinas, and the greatest threat to the American economy.
John Horvat: I have had the great pleasure of reading several of your books on economics. I suppose my first question is: how did you end up in the middle of the “dismal science?”
Dr. Gregg: I did some economic history as an undergraduate and for my graduate study, but it was really through studying natural law philosophy when doing my doctorate that I came to enter into some of the deeper background questions about the strengths and weaknesses of economics and economies. I was also very interested in the relationship between economics and culture – the latter being understood as the choices, beliefs, actions, values, and institutions that shape a society, including its economic arrangements. (more…)
In 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.”
In 1820, America’s per capita income averaged $1,980, in today’s dollars. But by 2000, it had increased to $43,000. That economic growth has benefited the rich, of course. But it has also transformed the lives of the poor — and prevented many more from becoming or staying poor.
In this superb short video, the American Enterprise Institute briefly explains the moral value of economic growth.
I had a chance to talk with Michelle Boorstein yesterday about David Brat and a bit of his work that I’ve been able to become familiar with over the past few days. She included some of my comments in this piece for the Washington Post, “David Brat’s victory is part of broader rise of religion in economics.”
I stressed that Brat’s research program, which in many ways emphasizes the relationship between Christianity and capitalism, has at least two basic features. First, he’s focused on increasing theological awareness of economic realities: “I never saw a supply and demand curve in seminary. I should have.” This kind of increased economic sensibility would help the church to be a positive factor for social cultural change: “The church needs to regain its voice and offer up a coherent social vision of justice and rationality.”
But on the other hand, Brat has a message for economists as well. He challenges the mainstream assumption of economics as merely a positive, value-free science that can provide objective answers to questions without the trappings of morality or religion. A comment on Boorstein’s piece illustrates this important aspect of Brat’s work:
Dave helped me understand the essentiality of the links between capitalism (voluntary exchange that serves both parties’ interests) and theology (man’s obligation to serve God through work and use gain to carry out Jesus’ admonition to help the poor). At first, I thought he was joking. Surely one did not have to embrace a theological perspective to be a good capitalist. But he was not joking. I now have a much more nuanced and mature understanding of the “moral foundations of capitalism” than I did before I met Dave.
Brat’s faculty page includes portraits of John Calvin, Adam Smith, Friedrich Hayek, and John Maynard Keynes. Obviously there’s a lot to David Brat and I look forward to becoming more familiar with him and his work.
Amid all of the bad reportage out there on Brat, and there is so much that it is hard to keep up, here are a few other pieces that I have found to be helpful:
- “The guy who beat Eric Cantor penned a scathing, seemingly unpublished book about the economics profession,” Vox
- “David Brat Just Became the Christian Right’s Favorite Economist,” NYMag
- “Capitalism and ethics drive Brat’s world view,” Washington Post
- “David Brat to Bernanke: Don’t Underestimate the Value of Protestants,” WSJ
- “5 Shocking Dave Brat Quotes the Media Will Never Report,” Intercollegiate Review
The gorilla-whale is back. And he’s here to stimulate the economy.
On Friday, theaters across the country will be debuting the fourth American remake of Godzilla (the name is a romanization of the original Japanese name “Gojira” — which is a combination of two Japanese words: gorira (‘gorilla’) and kujira (‘whale’). Over its opening weekend the film is projected to earn $78,000,000, and cumulative revenues of over $240,000,000. While that could be a generous stream of income for Hollywood, it’s a drop in the $17 trillion ocean that is the U.S. economy.
But what if instead of releasing the movie, the government were to convincingly lie to the American people about an imminent invasion by a 150 foot tall gorilla-whale? What would be the effect if the government said we must take action now to protect our way of life from the monster?
According to some liberal economists, it would lead to an economic boom. In defending President Obama’s stimulus proposal in 2011, Paul Krugman proposed a peculiar solution for economic recovery that is similar to an invasion by Godzilla:
On this Earth Day, says Pierre Desrochers, we should spare a thought for the profit motive, an unheralded but long-standing champion of the environment. “The search for increased profitability,” ntoes Desrochers, “has long delivered both economic and environmental improvements by promoting the evermore efficient use of material resources.”
With Earth Day near (this Monday), we hear the usual annual litany of laments from environmentalists, urging us to mend the errors of our industrial ways. Greed and profits, we are told in no uncertain terms, inevitably result in unmanageable pollution problems, the depletion of non-renewable resources, habitat and species destruction, and a regulatory “race to the bottom” among competing jurisdictions.
[. . .]
Typically missing from this debate, however, is the notion that the search for increased profitability has long delivered both economic and environmental improvements by promoting the increasingly efficient use of material resources, or, in other words, the creation of ever more economic value while using ever less physical stuff. While this notion is obvious in an age where whole libraries can be stored on small electronic devices, perhaps the best statement on the subject still belongs to Jonathan Swift, who argued nearly three centuries ago in Gulliver’s Travels that whoever “could make two Ears of Corn, or two blades of Grass to grow upon a Spot of Ground where only one grew before, would deserve better of Mankind, and do more essential Service to his Country than the whole Race of Politicians put together.
One small quibble: Desrochers’ otherwise fine article is marred by the title’s equating of the profit motive with “greed.” While I’m sure the term was merely used for rhetorical effect, the promotion of free enterprise is always harmed by the unnecessary association with the sinful and destructive motive of greed.
Ross Douthat (a scheduled plenary speaker at this year’s Acton University) has a noteworthy piece this week about the revival of sorts of Karl Marx: “Marxist ideas are having an intellectual moment, and attention must be paid.”
He looks at Marxism among Millennials, who perhaps can be excused for not knowing any better given their relative youth and the education many have received. Thus “the clutch of young intellectuals [Timothy] Shenk dubs the ‘Millennial Marxists,’ whose experience of the financial crisis inspired a new look at Old Karl’s critique of capitalism.” An example of what this might look like among evangelicals is this essay from The Evangelical Outpost, “Capitalism is Not God’s Dream for Humanity.” In this piece, Stormie Knott lists three dangerous things that about capitalism she learned from Marx: alienation, overconsumption, and exploitation.
To say that one might just as well learn those things from the Bible as from Marx, and with perhaps a bit more insight into the anthropological foundations of these problematics, would miss the larger point. Surely there are things one can learn from Marx. It’s just that the truths that Marx communicates are rather often more simplistic and less complex than the realities they purport to explain. But this is, perhaps, the nature of any ideology: to simplify and thus to distort.
Of course if one defines “capitalism” as that which alienates and exploits and so on, then you’ve covered your bases quite nicely, because how could anyone defend that?
This larger point is, as Peter Lawler notes, that Marx is one of the dominant narrators of the modern age, and one who must be reckoned with. His critique of the “conservative reactionaries” who sympathize with Marx is spot-on: “They too readily accept Marx’s description of capitalism as a realistic account of the world in which we live. They think of themselves as living in a techno-wasteland and of freedom as having become another word, these days, for nothing left to lose. Identifying capitalism with America, they become anti-American and anti-modern and almost as revolutionary in their intentions as members of Marx’s proletariat.”
Douthat concludes his piece by examining the work of Thomas Piketty, which Douthat says is “the one book this year that everyone in my profession will be required to pretend to have diligently read.” Not being among the intelligentsia, I have nevertheless duly placed my preorder of Capital in the Twenty-First Century on Amazon.
In an attempt to trap Jesus, some Pharisees and Herodians asked him, “Is it lawful to pay taxes to Caesar, or not? Should we pay them, or should we not?” In response, Jesus said,
“Why put me to the test? Bring me a denarius and let me look at it.” And they brought one. And he said to them, “Whose likeness and inscription is this?” They said to him, “Caesar’s.” Jesus said to them, “Render to Caesar the things that are Caesar’s, and to God the things that are God’s.”
The Pharisees and Herodians “marveled” at Jesus answer, but had they asked an agent of the Roman IRS they likely would have been given a similar answer.
Governments have always had to contend with citizens who make what are considered “frivolous tax arguments” to avoid complying with tax laws. Such arguments rarely work (it’s usually not effective to try to present a creative interpretation of tax law to the people who interpret tax laws) but people keep trying.
At Reason Thaddeus Russell argues that Macklemore and Lorde embody a kind of progressive cultural critique of capitalism, captured in the attack on “conspicuous consumption” made famous by Thorstein Veblen. Russell traces the “progressive lineage” of this critique: “Their songs continue a long tradition, rooted in progressivism, of protests against the pleasures of the poor.”
Having never listened to him, I have no opinion about Macklemore. Russell’s piece makes me want to take a moment to hear “Thrift Shop.” But over at Q Ideas today, I argue that in Lorde we find some cultural resources to inoculate us against the corrosive effects of envy.
The Christian tradition has long recognized that the poor can be just as materialistic and greedy as the rich. The poor just don’t usually have the same resources to bring those vices to such “conspicuous” manifestation. And it really is a stewardship problem to spend money on luxury goods when basic necessities are given short shrift.