… I think that economists have to approach their role as engineers with great humility. There’s a lot we don’t understand. Economics is still an early science. But let me read you the quote from Hayek that I included in my book. This is a quote from his free-market manifesto, The Road to Serfdom. And he wrote, “There is, in particular, all the difference between deliberately creating a system within which competition will work as beneficially as possible and passively accepting institutions as they are.”
So, that was Hayek. He understood that what makes a market free is that it has rules that allow it to work freely. And one of the metaphors I use in the book is of a wheel that can rotate freely. It’s not rotating in a vacuum. It has an axle and it has well-oiled bearings. And over time–people have been designing markets for millennia. And often the process of trial and error leads to better and better markets. But it can be a lengthy process of trial and error. And as we better understand what is required for marketplaces to help markets work freely we can sometimes intervene. And, you said ‘top down,’ but earlier you talked about Uber and Airbnb. Those are marketplaces that are not top down. People have been designing marketplaces forever. It’s what we do.
Cardinal Turkson: together for stewardship of creation
Cardinal Peter K.A. Turkson, Vatican Radio
Despite the generation of great wealth, we find starkly rising disparities – vast numbers of people excluded and discarded, their dignity trampled upon. As global society increasingly defines itself by consumerist and monetary values, the privileged in turn become increasingly numb to the cries of the poor.
Pope Francis endorses climate action petition
Brian Roewe, National Catholic Reporter
“He was very supportive,” Tomás Insua, a Buenos Aires, Argentina, native and co-founder of the group, said in an email. “[Pope Francis] even joked that we were competing against his encyclical before it was published.”
Martin Weitzman on Climate Change
Russ Roberts, Library of Economics and Liberty
Is climate change the ultimate Black Swan? Martin Weitzman of Harvard University and co-author of Climate Shock talks with EconTalk host Russ Roberts about the risks of climate change.
Rick Santorum On Pope Francis’ Letter On Climate Change: ‘Leave The Science To The Scientists’
Dom Giordano, CBS Philly
“The Church has gotten it wrong a few times on science, and I think we’re probably better off leaving science to the scientists and focus on what we’re really good on, which is theology and morality.”
I want to thank Bradley Birzer, a Hillsdale College prof who is currently Visiting Scholar in Conservative Thought and Policy at the University of Colorado Boulder, for offering Religion & Liberty an advance look at his forthcoming book on Kirk. A special thanks also to Annette Y. Kirk for her gracious help locating photos of her late husband in the archives of The Russell Kirk Center for Cultural Renewal in Mecosta, Michigan, and sharing these with our readers. Be sure to check out the website of the Kirk Center for news about its academic programs and publications.
Kirk was a long time advisor to the Acton Institute. Here is the audio from his last public lecture, hosted by Acton in 1994, on “Lord Acton and Revolution.”
In this issue of Religion & Liberty, we review two new books. Economist David Hebert tells us that Russ Roberts’ How Adam Smith Can Change Your Life – An Unexpected Guide to Human Nature and Happiness is a helpful reminder about the “limits of pure economics.” Even though the books and film adaptations of J.R.R. Tolkien’s mythic fantasies are phenomenally popular today, John Zmirak points out that his “bourgeois virtues were widely sneered at” by his contemporaries. He reviews The Hobbit Party: The Vision of Freedom that Tolkien Got and the West Forgot by Jonathan Witt and Jay Richards. (more…)
Thomas Piketty’s new book, Capital in the Twenty-First Century, has created quite the stir, and with its overwhelming size (700 pages) and corresponding array of commentaries and critiques, it’s tough to know where to start.
Cutting through such noise, Russ Roberts provides his usual service on EconTalk, chatting one-on-one with Piketty about the key themes, strengths, and weaknesses of the book. The interview is just over an hour, and I encourage you to listen to the whole thing.
Piketty lays out his argument quite concisely in the beginning, followed by a fruitful back-and-forth led by Roberts. For those who aren’t aware, the book chronicles a recent rise in economic inequality, wherein, by Piketty’s account, wealthy elites sit on their stashes while those at the bottom increasingly struggle to keep pace. His solution: Tax, baby, tax.
In response to such an approach, there are many areas to poke and prod, but Roberts zeroes in on one of the more fundamental and overarching questions: What about those who accumulate their wealth by helping those at “the bottom”? (more…)
Yesterday, Jordan Ballor explored the relationship between money and happiness, referring to money as “a good, but not a terminal good,” and pointing to Jesus’ reminder that “life does not consist in an abundance of possessions.”
Over at Café Hayek, economist Russ Roberts offers a good companion to this, advising college graduates to have a healthy perspective about money and meaning when entering the job market:
Don’t take the job that pays the most money. Nothing wrong with money, but it’s the wrong criterion for choosing if you are fortunate to have a choice in this not-so-great job market. People often confuse economics with anything that is related to money as if the goal of economics is to make you rich. But the goal of economics is to help you get the most out of life. Money is part of that of course, but usually there are tradeoffs–the highest paying job has drawbacks. Don’t ignore those. So take the job that is the most rewarding in the fullest sense of the word. Sure, money matters. But so does how much you learn on the job, how much satisfaction it gives you and whether it lets you express your gifts. The ideal is to find a job you love that still lets you put food on the table and a roof over your head. You spend a lot of time at work. Don’t do something you hate or that deadens your soul just because it pays well.
Time is precious. One of the simplest but most important ideas of economics is the idea of opportunity cost–anything you do means not doing something else. Don’t spend all of your leisure on email and twitter and entertainment. Keep your brain growing. Listen to Planet Money. Read a novel. Take a cooking class or keep working at that musical instrument.
Stanford economists Russ Roberts and John Taylor offer a helpful discussion potential GDP, recessions, and recoveries. Their comparison of previous recession/recovery cycles to the most recent one helps to illuminate just how unusual (read: terrible) our current recovery has been.
(Via: Cafe Hayek)
Some come like Nicodemus – a religious leader who came to talk to Jesus in private – at night. Many have felt remorseful about what happened on Wall Street and how it has hurt so many people. They describe the behavior in their profession with words such as “greedy,” “risky,” or “reckless.” These business and banking leaders do feel sorry, but repentance means that remorse must be coupled with a change in the behaviors that led to the problems.
The Prophet, who can read their very thoughts (“repentance and accountability were far from their minds”), bids them to change their ways and reminds them about God and Mammon. But it is not so much a conversion of hearts and minds Wallis is asking for, as it is the divine wrath of Washington regulators. His three-point plan (emphasis mine):
First, provide transparency and accountability. Given the human condition and the many temptations of money, we need transparency and accountability in financial markets and instruments, including high-risk and questionable ones such as the now infamous “derivatives.” To protect the common good, we need to enact greater regulation and oversight of all elements of the banking industry.
Second, provide consumer protection. Any pastor can now tell you stories of how parishioners were mistreated, cheated, and damaged by current banking practices. Many clergy strongly favor protecting consumers from predatory financial practices. They want a strong independent Consumer Finance Protection Agency, with jurisdiction and enforcement power over all companies in the financial sector, in order to protect people from fraudulent, misleading, and abusive practices.
Third, limit size and risk, so banks are no longer too big to fail – and are bailed out at public expense. This means setting limits on the size of financial institutions and the risks they can take. Ban bank ownership of private investment funds, and establish an orderly process to dissolve a failing bank, in order to avoid future taxpayer bailouts. Give a stronger voice to shareholders and investors in institutional practices and policies – including determining the executive compensation of companies, and the now infamous bank executive bonuses.
A much more intelligent and balanced analysis of the financial crisis was published yesterday by Russ Roberts, a professor of economics at George Mason University and a scholar at the Mercatus Center. Note the complete lack of cheap moralizing that informs so much of Wallis’ economic “analysis.” This is from the introduction to Roberts’ “Gambling with Other People’s Money”: (more…)
From Econstories.tv: In Fear the Boom and Bust, John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the economic crisis. Before the conference begins, and at the insistence of Lord Keynes, they go out for a night on the town and sing about why there’s a “boom and bust” cycle in modern economies and good reason to fear it.
Lyrics sample (written by John Papola and Russ Roberts):
We’ve been going back and forth for a century
[Keynes] I want to steer markets,
[Hayek] I want them set free
There’s a boom and bust cycle and good reason to fear it
[Hayek] Blame low interest rates.
[Keynes] No… it’s the animal spirits
John Maynard Keynes, wrote the book on modern macro
The man you need when the economy’s off track, [whoa]
Depression, recession now your question’s in session
Have a seat and I’ll school you in one simple lesson
BOOM, 1929 the big crash
We didn’t bounce back—economy’s in the trash
Persistent unemployment, the result of sticky wages
Waiting for recovery? Seriously? That’s outrageous!