Posts tagged with: profit

initiativeThe term “free market” doesn’t really capture the essence of the economic system that produces prosperity, says Michael Novak. The secret that “liberated more than a half billion of their citizens from poverty” was not mere freedom but private ownership and personal initiative.

The new economy in which we live is often called “the free market economy.” But markets are universal. Markets were central during the long agrarian centuries, through biblical times, in all times. For this reason, the term “the market economy” or even “the free-market economy” somewhat misses the mark.

More accurate is the “initiative-centered,” the “invention-centered,” or in general the “mind-centered economy.” More than anything, mind is the cause of wealth today. The Latin word caput (head) — the linguistic root of “capitalism” — has inadvertently caught the new reality quite well.

“The free economy” captures only part of the secret — it emphasizes the conditions under which the mind is more easily creative, in the fresh air of freedom. Freedom is a necessary condition, but the dynamic driving cause of new wealth is the initiative, enterprise, creativity, invention — which use the freedom.

Freedom alone is not enough. Freedom alone can also produce indolence and indulgence. To awaken slothful human beings out of the habitual slumber and slowness of the species, the fuel of interest must normally be ignited. One must move the will to action by showing it a route to a better world. Since humans are fallen creatures, mixed creatures, not angels, the fuel of interest is a practical necessity. The fire of invention lies hidden in every human mind, the very image of the Creator infusing the creature. To ignite it, one must offer incentives, a vision of a higher, better human condition, not only this-worldly, but also nourishing the expansion of the human soul and easement of bodily infirmities.

There is a natural desire in every human being, although it is often slumbering, to better his or her condition. And it is good for a woman to liberate herself and her whole people from the narrower horizons within which they find themselves. It is good for humans to catch glimmers of new possibilities for human development.

This, or something very like this, is the famous, celebrated and usually misunderstood “spirit of capitalism.” This is not a spirit of greed or avarice, which are grasping and small, not creative. It is an esprit, a gift of the spirit rather than of the body.

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Acton Institute Director of Research Samuel Gregg joined host John Harper on Relevant Radio’s Morning Air on Friday morning to discuss his latest book, For God and Profit: How Banking and Finance Can Serve the Common GoodBanking and finance are vitally important institutions in a free and prosperous society, and ordered properly contribute a great deal to the common good. The real question of the day is whether or not our banking and finance systems are properly ordered, and if they have gotten off track, how to reorient them toward the common good.

The full interview is available via the audio player below.

walter_williams2On this day in 1936, Walter E. Williams was born in the city of Philadelphia. The George Mason University economist is famous for his classical liberal views, often arguing that free market capitalism is not only the most moral economic system known to mankind, but it allows for the creation of the most wealth and prosperity. He has discussed many diverse themes, including: race in the United States, politics, liberty, education, and more. A prolific writer, Williams has written ten books, dozens of essays for scholarly journals, and hundreds of newspaper articles.

In honor of turning eighty, here are ten excellent quotes from Williams:

At the beginning of each semester, I tell students that my economic theory course will deal with positive, non-normative economic theory. I also tell them that if they hear me making a normative statement without first saying, “In my opinion,” they are to raise their hands and say, “Professor Williams, we didn’t take this class to be indoctrinated with your personal opinions passed off as economic theory; that’s academic dishonesty.” I also tell them that as soon as they hear me say, “In my opinion,” they can stop taking notes because my opinion is irrelevant to the subject of the class — economic theory. Another part of this particular lecture to my students is that by no means do I suggest that they purge their vocabulary of normative or subjective statements. Such statements are useful tools for tricking people into doing what you want them to do. You tell your father that you need a cell phone and he should buy you one. There’s no evidence whatsoever that you need a cell phone. After all, George Washington managed to lead our nation to defeat Great Britain, the mightiest nation on Earth at the time, without owning a cell phone.

Democracy and liberty are not the same. Democracy is little more than mob rule, while liberty refers to the sovereignty of the individual.

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Blog author: jballor
Wednesday, July 23, 2014
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Giotto di Bondone - No. 27 Scenes from the Life of Christ - 11. Expulsion of the Money-changers from the Temple - WGA09209Last month the New York Times hosted a discussion on the question, “Has Capitalism Become Incompatible With Christianity?” There’s lots to be said about the “Room for Debate” feature, including a note on the caption for the lead image in the introduction.

The image is a rendering of the classic scene from the Gospels, Jesus’ cleansing of the temple. The NYT caption reads thus: “Jesus comes down hard on the bankers of his day.” Perhaps that’s a bit of ideological balance for the phrasing of the debate question itself, which supposes that at least at one time that “capitalism” and Christianity were compatible, even if they are no longer.

Occasioned by the NYT feature, although not a direct response, is a piece today over at Think Christian, in which I introduce what I consider to be some important distinctions to keep in mind when thinking about the Christian faith and economics.
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FeaturedImageOn 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.

Give and Take: A Revolutionary Approach to SuccessWhen discussing economics, we frequently encounter the zero-sum fallacy: the notion that the economic pie is fixed, that there is always a winner and a loser, and that, for someone to grow rich, another must become poor.

Yet in a market wherein rule of law, contracts, and property rights are properly established, the pie will surely grow. We are not static balls of flesh nestled comfortably in a static universe. We are spiritual beings made in the image of a creative God, and mutual trade and exchange help accelerate our efforts to create and collaborate alongside our neighbors. As Jay Richards notes, the uniqueness of the human person feeds into how economic value is actually determined.

But although we typically discuss the errors of such thinking in matters of basic material exchange, we should note that such a fallacy can just as easily filter into our broader social and spiritual activities in the workplace. Such limited thinking can trap us in a sort of self-centered tunnel vision, whether with our clients, co-workers, or competitors, leading us to assume that success cannot come if we allow any wiggle room for generosity, whether in basic service, various collaborations, or even end-game negotiations.

In an article for The Atlantic, Emily Esfahani Smith touches on these themes by highlighting a new book, Give and Take: A Revolutionary Approach to Success, wherein organizational psychological Adam Grant seeks to challenge such zero-sum thinking, arguing that by having a fuller, more healthy perspective of mutual gain, we can move forward together toward a more productive, more fulfilling economic and social environment. (more…)

Blog author: crobertson
Wednesday, November 21, 2012
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In the Autumn 2012 issue of Response, Jeff Van Duzer, wrote an article entitled, “Does Business Matter To God,” on the issue of faith and work. He is a well-respected professor of business law and ethics at Seattle Pacific University who gives a unique look into the role faith plays in business. This entire issue of Response is dedicated to the topics of faith and work. I will write about a few other noteworthy articles over the coming weeks.

Van Duzer starts the article by recounting a conversation he had with his father on the purpose of business. In the middle of his attempt to explain his view on the matter, his dad interrupted him and said:

Jeff, everyone knows what the purpose of business is. The purpose of business is to make money.

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