On NewsMax, Edward Pentin reports that “the president of the Vatican Bank has said that emerging economies may be the only countries experiencing economic growth over the coming decades, while Western nations are crippled by lack of productivity, uncompetitive labor markets, and aging populations.”

Ettore Gotti Tedeschi said the “next decades risk seeing exclusively the growth of emerging countries, and not just because of their low cost of production but also due to their advanced technological level and capacity to create capital, which is far superior to that of the old West.”

The English translation of Tedeschi’s comments have been published in the editorial “Re-inventing labor” on the website of the Vatican newspaper, L’Osservatore Romano.

Blog author: lglinzak
posted by on Wednesday, June 22, 2011

The European Union’s finances are in a dismal state, and are requiring governments to revaluate the “welfare state.”  Samuel Gregg articulates in his article appearing in The American Spectator, “Europe’s Not-So-Revolutionary Youth,” that a youth movement called les indignés or los indignados, depending on where you are, is resisting the reforms being proposed:

This time, however, things are different. With barely-disguised reluctance, governments across Western Europe are proceeding with relatively minor reforms aimed at reducing the European welfare state’s costs. But les indignés are protesting not only the pain of change — they also clearly resent the changes themselves.

Of course there’s an anarchist fringe to these youth protests — the ski-masked individuals who routinely join any demonstration to exult in the joy of physical violence against police and random destruction of private property. But by and large, the indignant ones want exactly what their parents and grandparents regard as their birthright: not-too-exacting jobs-for-life, free health-care, state-guaranteed minimal-incomes, six weeks paid annual vacation, early-retirement, and generous state-provided pensions.

In other words, they want Social Europe. Los indignados don’t, however, apparently comprehend just how much this economic system has contributed to their present plight.

Gregg further explains that while the youth are fighting for a return to the status-quo in Europe, demographic trends undermine their case:

Many young Europeans are also remarkably unaware that Europe’s demographic trends are further tilting the scales against them. The below-replacement birth-rates prevailing in almost every European nation will result in the proportion of active workers to retirees across the EU shifting over the next twenty-five years from a 2:1 ratio to a 1:1 ratio.

This makes it unlikely that even present reforms, such as raising retirement ages, can forestall an eventual implosion of Europe’s welfare states — a process that, at present rates, will be underway long before les indignés come even close to receiving their first state-pension check.

Nor do los indignados appear to realize that any chance they might have to force through liberalizing economic reforms via democratic means is weakening by the day.

The same demographic developments that will severely compromise their financial prospects are also reducing young Europeans to the status of a minority in the world’s most rapidly aging continent. This progressively diminishes their ability to out-vote Europe’s millions-strong (and growing) gerontocracy who, AARP-like, appear quietly content to live off their children’s future.

Los Indignados should be angry about the present situation they are faced with. However, a return to the status-quo fails to acknowledge that it is the status-quo that put Europe in its current financial hardship. Instead, los indignados should be fighting for more dramatic change moving Europe away from the welfare state.

Click here to read the full article.

Blog author: lglinzak
posted by on Wednesday, June 22, 2011

Ethanol subsidies, once considered a sacred cow, are facing the possibility of being axed from the budget. The Senate cast a deciding vote, 73-27 in repealing the 45 cent per gallon subsidy to refiners for blending gasoline with ethanol, and the 54 cent per gallon tariff on imported ethanol.

Cutting the ethanol subsidy and repealing the tariff still face an uphill battle as it must pass the house and get the signature of President Obama, who has vowed not to fully repeal the subsidy. Supporters of ethanol are fighting harder to preserve the subsidy and tariff, and are now issuing claims that the ethanol subsidy keeps gas prices lower than what they would be if the subsidy wasn’t in place.

Iowa State University released a study arguing that ethanol has helped suppress gasoline prices. It is of no surprise that supporters of the ethanol subsidy and tariff have embraced the study by Iowa State University with open arms and are using it to add weight to their position.

Unfortunately for supporters of the ethanol subsidy, the Institute for Energy Research, released its own study debunking the arguments from Iowa State. While the Institute for Energy Research admits that removing the ethanol subsidy will result in a short-term spike in gasoline prices, they argue that in the long run consumers are better off without the ethanol subsidy–ideally the country would’ve been better off if the subsidy had never existed.

Those who claim that removing the ethanol subsidy and tariff will increase gasoline prices also fail to acknowledge principles of basic market economics. By removing the tariff, the United States is able to import cheaper ethanol from countries like Brazil, which produce the cheaper sugar-based ethanol, thus making ethanol more affordable for consumers. As a result, the market adds a product to compete with gasoline, and through competition, may drive the price of gasoline lower.

The concept of competition driving down prices is explained by Joel Velasco, former chief representative in North America for the Brazilian Sugarcane Industry Association. Velasco argues that competition between corn and sugarcane ethanol will benefit consumers. The principle of competition found in his argument can be applied to competition between gasoline and ethanol as well.

While it may seem like ethanol from Brazil is a perfect solution, there are unintended consequences that must be weighed. Ecology professor at the University of São Paulo in Brazil, Luiz Martinelli, warns of the many problems with Brazilian ethanol in an article published in the Cornell Daily Sun. Martinelli explains that ethanol production pollutes the environment and results cause serious problems:

Ethanol production fosters deforestation in Brazil. Sugarcane needs a well-defined drought season to concentrate sugars in the cane stalk, making the wetter Amazon region less than ideal for growth. Consequently, growers convert increasing areas of land in the transitional area between the cerrado grasslands and the Amazon forests to sugarcane. As a result, the increase may indirectly lead to deforestation as other crops, like soybean, are pushed into the Amazon.

“We don’t have much room for deforestation. If sugarcane causes 1,000 of squared kilometers of deforestation, we’ve set off any savings [of avoided carbon emissions] that we have saved,” emphasized Martinelli.

Such unintended consequences were also articulated by Ray Nothstine on the PowerBlog in 2007 as religious leaders began to express alarm about increasing ethanol production:

Religious leaders are speaking out. In March, Roman Catholic bishops in Brazil warned that a rapid increase in ethanol production based on sugar cane could lead to widespread deforestation, massive relocation of workers and their communities, and harsh working conditions for cane cutters. Analysts predict that Brazil, the world’s largest exporter of ethanol, may increase ethanol production as much as 40 percent in the next four years. “We are going to turn the country into a huge cane (plantation),” said Cardinal Geraldo Majella Agnelo. In Colombia, Christian aid organizations say armed groups are driving peasants off their lands to make way for plantations of palm oil, another biofuel. Acreage dedicated to production of the palm oil tree has more than doubled in the last four years.

Nothstine later explains in “‘Big Corn’ and Unintended Consequences” how corn ethanol will increase food prices, is more costly to produce and transport, and has pollution problems.

If ethanol made from sugarcane gains traction in the United States and other countries, the same questions that have been raised by corn ethanol must also be asked when it comes to sugar-based ethanol. Will we have a problem with unintended consequences? Will sugar ethanol contribute to rising food prices in a manner similar to that of corn ethanol? What effects will sugar ethanol have on the environment, and what are the impacts of deforestation?

Blog author: jcouretas
posted by on Tuesday, June 21, 2011

On RealClearMarkets, Mark Hunter dismantles “The End of Capitalism and the Wellsprings of Radical Hope,” by Eugene McCarraher in the Nation magazine. McCarraher’s article appears to be destined for the ash heap of Marxist utopian literature. But Hunter’s critique is valuable for his reminder that capitalism, free enterprise, the market economy — all the systems of mutually beneficial free exchange by whatever name — have actually been ingrained in human culture as far back as the ancient spice trade and probably earlier.

McCarraher’s denunciation of capitalism is in fact an attack on human nature disguised as political discourse. The “pernicious” traits he attributes to capitalism are, in fact, traits globally present in every political/social order — in many cases far worse in non-capitalistic societies — because they are traits of humanity itself.

His entire argument against capitalism consists of nothing more than an elaborate correlation-proves-causation fallacy (cum hoc ergo propter hoc – “with this, therefore because of this”). He wants us to believe that since capitalism contains greed it causes greed. Furthermore, McCarraher seems content to overlook the fact that capitalism is an organic economic system not created as much as evolving naturally as a consequence of free individuals interacting with other free individuals. Private property and the production of goods may be a part of capitalism, but its most essential virtue is as a guardian of man’s freedom.

Criticizing capitalism for its avarice is not unlike condemning representative democracy for its failure to elect the wisest of men — each may occur, but it is not relevant to their fundamental purpose. Both capitalism and representative democracy maximize freedom by diffusing power and responsibility across the broadest spectrum of society. Rigid control is antithetical to freedom and it is this that most vexes the liberal intellectual.

Hunter, a professor of humanities at St. Petersburg College in St. Petersburg, Fla., exposes the empty spiritual promise of collectivist schemes. McCarraher’s “radical hope” is:

… in the end enslavement. The only way to deliver mankind from the demon Mammon will be by removing the greatest gift of the gods – freedom. In this Faustian exchange we are guaranteed the Marxist security of bread, authoritarian certainty of order and utopian unity of world government.

It’s not clear if Hunter’s definition of freedom as the “gift of the gods” is meant literally, in a pantheistic sense, or is merely employed as a rhetorical flourish. But he doesn’t make McCarraher’s mistake and propose capitalism as a path to salvation (For a deep going exposition of Christian anthropology, see Metropolitan Jonah’s AU talk we posted on the PowerBlog yesterday).

Hunter defines capitalism as “an organic economic system not created as much as evolving naturally as a consequence of free individuals interacting with other free individuals. Private property and the production of goods may be a part of capitalism, but its most essential virtue is as a guardian of man’s freedom.”

Read “To Attack Capitalism Is To Attack Human Nature” on RealClearMarkets.

Blog author: rnothstine
posted by on Tuesday, June 21, 2011

We’ve all heard of presidents, governors, and other civil leaders calling citizens to prayer in times of great need. In April, Texas governor Rick Perry called on his citizens to pray for rain because of an extreme drought.

It looks like the mayor of Harrisburg, Pa. is about to embark on a three-day fast and prayer practice for help with the city’s bleak budget deficit. The idea of the fasting and prayer is meant to help unite citizens to solve the crisis. Bravo, if that is the case. One would have to be concerned though if religion is invoked to avoid the hard choices facing government everywhere and it morphs into the ideological “What Would Jesus Cut?”

In a news story on the city’s prayer and fast effort, a local pastor explained:

The Rev. Herb Stoner, pastor of adult training at Christ Community Church of Camp Hill, said the answers to problems in Harrisburg and the region won’t be found in the wisdom or ability of humans.

This much is true, given the financial hole leaders of the city have dug for its citizens. I suspect we might see even more calls for divine help with the debt crisis, as it becomes even more apparent how serious and distressing it is for most of the people across this land. In a speech earlier this year, Indiana Governor Mitch Daniels called the federal debt “the new red menace.” If the comparison rings true, history tells us it will require colossal sacrifice and resolve to combat the national debt.

Metropolitan Jonah at AU 2011



We’ve posted the text of Metropolitan Jonah’s AU talk on “Asceticism and the Consumer Society” on the Acton site. His remarks, delivered on Thursday, June 16, at the plenary session looked at the “opposing movements in the human heart” between consumerism and worship. In the course of his talk, Jonah cited Orthodox Christian theologian Fr. Alexander Schmemann’s definition of secularism as “in theological terms … a heresy … about man.”

Jonah:

Man was created with an intuitive awareness of God and thankfulness to Him for the creation. In return, the creation itself was made to be a means of communion and revelation of God to man. Man was thus created as a Eucharistic being, the priest of creation, to offer it in thanksgiving to God, and to use it as a means of living in communion, the knowledge and love of God. Man was created to worship. In our fallenness, turning from God to created things as ends in themselves, we lost the intuitive knowledge of God and our essential attitude of thankfulness to Him. Secularism is rooted in this loss of divine awareness, the darkening of our intuitive perception of the creation as the sacrament of God’s Presence. It is a denial of our essential reality as human beings, and our reduction to purely material animals. Thus the refusal to worship and give thanks, to offer the creation in thanksgiving back to God, is a denial of our very nature as humans.

What Schmemann is testifying to is that “worship is truly an essential act, and man an essentially worshipping being.” It is “only in worship” that I can find “knowledge of God and therefore knowledge of the world.” As the etymology of the word orthodoxy suggests, the true worship of God and the true knowledge of God converge and are together become the foundation of obedience to Him.

Jonah, primate of the Orthodox Church in America, said the “fruit” of secularism is despair. The cure for this despair is the Cross of Jesus Christ:

The Christian ascetical life, that is the life of prayer, fasting and almsgiving, the works of mercy and obedience, is the application and the appropriation of the Cross to my life. It is the means by which I both enter into a life of communion with God and become myself a sacrament of that communion for others. This is possible because at its most basic level, asceticism “is the struggle of the person against rebellious nature, against the nature which seeks to achieve on its own what it could bring about only in personal unity and communion with God.” Our “restoration” to a life of personal communion with God and so our personal “resistance” to the powers of sin and death, “presuppose a struggle” within each human heart that is often lacking in contemporary society and even our churches.

Read Metropolitan Jonah’s “Asceticism and the Consumer Society” on the Acton site.

Special thanks to Koinonia, Monomakhos, Byzantine, TX, The Pulp.it, RealClearReligion, Preachers Institute and the American Orthodox Institute for linking to this post.

Blog author: lglinzak
posted by on Monday, June 20, 2011

Current events in India have left the country wrestling with an important question: What is civil society and what does it consist of? These are not easy questions to answer as definitions of civil society can greatly vary.

According to a story on the Wall Street Journal’s  India Real Time section, “…political demonstrators have demanded greater civil society involvement in the governing country…” While many throughout India are trying to define a civil society and who represents it, the Journal cited a definition by Samuel Gregg, research director at the Acton Institute:

Samuel Gregg, … notes that up to around the 18th century, the term “civil society” was used to distinguish the realm of the secular from the realm of the church, but then underwent a shift. India Real Time made a stab at defining the term “civil society” from his work as comprising those “intermediate associations” of society – academic, cultural, religious or charitable – that are separate from the family, and from the institutions of the state and the market. Mr. Gregg calls such associations “little platoons” that draw “people out of their immediate family without subsuming them into the state” and that have “the capacity to assist people to look towards those higher ends of truth, beauty, and the good.”

This definition effectively covers charities, non-governmental organizations or NGOs, civic associations like local Residents’ Welfare Associations, social movements, traders’ associations, social service initiatives, faith-based groups and so on.

Click here to read to full article.

Blog author: jballor
posted by on Friday, June 17, 2011

Today at Capital Commentary I discuss the size and scope of the tax code in the US relative to its basic purposes.

In “Back Door Social Engineering,” I argue, “When governments run huge deficits in part because of the complexity of its tax system and the ability of people and institutions to engage in large-scale (and legal) tax avoidance, there is something deeply wrong with the system.”

The basic purpose of taxes is to raise money for the government, not to determine social behavior. We have laws for that.

Read the whole thing here.

Acton University has been full of thought provoking lectures and stimulating discussion. It is easy to see why the attendees wish the conference was much longer. There are many interesting lectures, one just wishes he or she could attend all of them.

Yesterday Dr. John Bolt, of Calvin Theological Seminary, taught a course titled “Centralization and Civil Society.” Bolt’s course paid special attention to Alexis de Tocqueville and his contributions to defining a civil society. As one can imagine, by bringing Tocqueville into his lecture, Bolt discussed the role of religion and the sense of community in the United States.

Bolt explained that America is self-reliant; however, this self-reliance didn’t come through reflection. The American people didn’t wake up one day and decide they wanted to be more self-reliant. Instead, Bolt explains that America’s self-reliance is habitual. Furthermore, Bolt discussed how Tocqueville demonstrated that America can afford to be self-reliant and individualistic because it was founded on Christian principles and that liberty exists in the United States because of religion and Christian principles.

The dinner lecture was a real treat last night. The Acton Institute has always promoted entrepreneurship and what it means to intertwine faith with entrepreneurship. A panel of successful entrepreneurs shared their insight on how business can promote the common good. Betsy DeVos, chairman of the American Federation for Children and Alliance for School Choice and chairman of the Windquest group, articulated how she finds joy in enterprises that make a difference in other people’s lives. She believes that enterprise is a vehicle we use and invest our God given talents in.

According to Mark Murray, president of Meijer, Inc., entrepreneurs need to be servant leaders. In order to succeed they must remain rooted in integrity. Murray explained how the values found in Christianity, such as humility, are not only applicable but needed in business. Furthermore, we are all created in the mage and likeness of God. We are called to use our God given gifts and express our creativity. Murray believes we put our talents and creativity to use through work, and the development of the human capacity is promoted through business.

Stewardship was highlighted by John Kennedy, president and CEO of Autocam. We are all temporary custodians of everything and have to do the best with the assets we are given. Furthermore, Kennedy said that we must remember people and employees are all assets and leaders must discover the gifts of their employees and how those gifts can most help the enterprise. Not only are employees assets, but so is capital. Entrepreneurs are called to be stewards of both their employees and capital and use all they are given to the fullest extent, and by doing this entrepreneurs demonstrate their appreciation for all God has given and blessed them with.

While there are flawed business leaders who are not examples of how businesses contribute to the common good, Acton University attendees witnessed what it really means to be called to entrepreneurship. When the calling of entrepreneurship is accepted and founded in Christian principles, the entrepreneur is a tool to create and promote the common good.

Continuing the tradition from 2010, Acton University 2011 lectures will be available for purchase online from our secure order page.  New lectures will be posted as they conclude throughout the week, so check back often.

The downloads are in MP3 format and can be transferred to any device that plays audio files such as an iPod or smartphone.

Here are some useful Acton University links: