When we think of rule of law failure, countries like Zimbabwe and Somalia come to mind. But as Acton Research Director Samuel Gregg points out in his latest piece over at Public Discourse, rule of law can also be subtly eroded in wealthy countries. The negative consequences for risk-taking, entrepreneurship, and long term investment, he says, can be far-reaching.

Risk is an inherent part of the workings of market economies. But Gregg notes that’s not the same thing as uncertainty:

Measurable risks are . . . no deterrent to the making of economic choices. If we take them seriously, they help us to calibrate our economic choices to be consistent with our responsibilities, resources, and opportunities. The same measurements also allow us to distinguish between prudent risk takers and the reckless, and reward them appropriately. Uncertainty, by contrast, involves those risks that cannot be quantified. It can occur either because of the sheer complexity of a given situation or because the subject matter cannot be reasonably measured. As long as a situation of uncertainty persists, it will deter many people from even considering whether to take economic risks.

Uncertainty in America, according to Gregg, is being magnified by the sheer complexity of laws such as the United States Internal Revenue Code:

A tax code of this size and complexity which is subject to so many sources of potentially conflicting official and semi-official explanations is bound to embody significant contradictions, and offers considerable scope for arbitrary decision-making. Uncertainty is the result. It’s also valid to claim that the same tax code may well be impossible for large numbers of honest law-abiding citizens to understand and comply with—not to mention difficult for conscientious civil servants to administer justly. As a result, many people may unintentionally violate the law or simply choose to forgo making any number of potentially wealth-creating opportunities for fear of violating the law.

Another example is the thousands upon thousands of pages of legislation being passed by Congress every year. As Gregg writes:

Then there are the rule-of-law problems associated with the sheer volume of law that directly shapes American economic life. The 2010 healthcare reform legislation, for instance, amounted to 2,700 pages. Not far behind it in length was the 2010 financial overhaul act: a mere 2,300 pages. More than a few legislators have confessed to never having read either piece of legislation in its entirety. Nor should we assume any great familiarity on their part with the thousands of pages of legislation which these acts superseded, integrated, or reinterpreted. The possibility that many laws governing healthcare and financial services have subsequently been rendered unclear, inconsistent, and impossible to comprehend is high.

These erosions of rule of law, Gregg says, result in large incentives not to take risks and not to make long-term investments. It also encourages entrepreneurs to look elsewhere for a more friendly, stable and comprehensible legal environment.

Read the piece in its entirety at Public Discourse.

There was a good deal of discussion in the media over “unfair” executive compensation, especially in light of the bonuses, golden parachutes, and other forms of remuneration received by CEOs during the bailout.

I have yet to hear much complaint about CEOs being underpaid, though.

But this might change as it becomes apparent that under-compensation of executives might well be a way to wriggle out of higher payroll tax liability. Consider the case of CPA David Watson, who “incurred the wrath of the IRS by only paying himself $24,000 a year and declaring the rest of his take profit.” The Slashdot piece makes the compelling conceptual connection between Watson’s case and that of “the much ballyhooed $1 Executive club like Steve Jobs, Larry Ellison, Sergey Brin, Larry Page, and Eric Schmidt.”

The outcome of this? According to a WSJ overview of the Watson case, “Pay can vary—but it can’t be too low.”

I think if we follow the golden rule we’ll get a golden mean for the golden parachute so that it won’t strangle the golden goose.

I’ve issued a call for publication for a special issue of the Journal of Markets & Morality to appear in the Fall of 2011 (14.2). The details are below, and you can download and circulate a PDF as well.


Call for Publication: Modern Christian Social Thought

In recognition of a number of significant anniversaries occurring this year, the Journal of Markets & Morality invites submissions for a special theme issue, “Modern Christian Social Thought” (vol. 14, no. 2). The year 2011 marks the 120th anniversary of Rerum Novarum, the encyclical from Leo XIII in 1891 that inaugurated the subsequent social encyclical tradition. 2011 also marks the 20th anniversary of John Paul II’s encyclical Centesimus Annus, which was promulgated at the centenary of Rerum Novarum.

This year is also the 120th anniversary of the First Social Congress in Amsterdam, which has become well-known as a representative of the trend of European social congresses in the last half of the nineteenth and early decades of the twentieth centuries. Abraham Kuyper, the noted Dutch theologian and statesmen, gave the opening address at this First Social Congress, a speech that set the tone for addressing the “social question” in light of Christian ethical reflection.

In recognition of these important events and their bearing for the course of Christian social thought over the last century and beyond, the journal welcomes submissions focusing on aspects of social thought in the various traditions, both within the Reformed or Roman Catholic tradition as well as in comparative and constructive dialogue between the two. This issue will include a new translation of a selection by Abraham Kuyper. The journal also welcomes proposals for translation other important sources related to the issue’s theme that have not been widely available previously in English. We also welcome submissions focusing on social thought in other Christian traditions, particularly Lutheran and Eastern Orthodox, in the modern era (from roughly 1850 to today).

The special theme issue, “Modern Christian Social Thought,” will appear in the Fall of 2011, and article submissions must be received by August 1, 2011, in order to proceed through the review process in a timely manner.

Queries are welcomed, as are submissions by international scholars and graduate students.

Please direct all correspondence and submissions to:

Jordan J. Ballor
Executive Editor
Journal of Markets & Morality
jballor@acton.org

About the journal:

The Journal of Markets & Morality is a peer-reviewed academic journal published twice a year–in the Spring and Fall. The journal promotes intellectual exploration of the relationship between economics and morality from both social science and theological perspectives. It seeks to bring together theologians, philosophers, economists, and other scholars for dialogue concerning the morality of the marketplace.

Submission guidelines, subscription information, and digital archives are available at: http://www.marketsandmorality.com/

An interesting report in The Economist on the rise of flashy and free spending entrepreneur “gazillionaires” in India and China and how they are perceived:

In much of India, life is getting perceptibly better each year. Wealth per person has vaulted by 150% in the past decade, from $2,000 to $5,000. Many Indians think the nation’s entrepreneurs deserve some of the credit. In Dharavi, a slum outside Mumbai, an illiterate mother called Aruna sits in her tiny one-room flat, which is home to ten people. Asked how she feels about the rich, she says: “They have worked hard. And we must work hard, too.” Her eldest daughter has a job entering data at a bank. The next one is studying diligently. The family may be near the bottom of the ladder, but it sees a way up.

But this in China:

The perception that commercial success often depends on political ties makes inequality in China more galling. In the mid-1980s Chinese incomes were more evenly distributed than India’s—hardly surprising, since China was nominally communist and India is afflicted by a caste system. But now China is less equal than India, with a Gini coefficient of 0.4 to India’s 0.37. China has 800,000 dollar millionaires, but also 400m people who live on less than $2 a day.

Radio Free Acton hits the web once again today, this time featuring an exchange between Hunter Baker, author of The End of Secularism, and Jonathan Malesic, author of Secret Faith in the Public Square: An Argument for the Concealment of Christian Identity. Their conversation continues an exchange begun in the Controversy section of the latest issue of Acton’s Journal of Markets & Morality. Should Christians be overt about their faith when operating in the public square, or should Christian identity remain concealed in order to protect the faith from being drained of any real meaning? Baker and Malesic provide some thought-provoking perspectives on this vital question. [Ed. note: As an exclusive for PowerBlog readers, you can read the Malesic/Baker controversy in the Journal of Markets & Morality here.]

Additionally, we’re pleased to bring you an interview with Rev. John Armstrong recorded after his December 1st Acton On Tap event on Ecumenism and Ideology, in which we discuss what authentic ecumenism really is, as opposed to ideology.

To listen, use the audio player below:

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In this week’s Acton Commentary, “The Sheep and the Goats: Work and Service to Others,” I visit Lester DeKoster’s interpretation of the parable of the sheep and the goats from Matthew 25. Although not many have discussed this as an “economic” parable, DeKoster’s point is that anyone who truly serves another through legitimate work, whether paid or unpaid, can be understood to be a “sheep.”

Work, for DeKoster, is “the form in which we make ourselves useful to others, and thus to God.”

I don’t discuss another point DeKoster makes in his book, Work: The Meaning of Your Life–A Christian Perspective, that relates to what results from the aggregation of individuals’ work. The answer is civilization: “Work shares in weaving civilization, which is the form in which others make themselves useful to us, by providing us with the tools for doing our work well.”

DeKoster points to the chair in which you sit while you read, or any of the other myriad objects that surround you, that could only have been produced by the contributions of countless workers through the assembly line and supply chain. Joseph Sunde over at Remnant Culture has a post up today that echoes this, focusing on the example of the toaster. His poignantly asks whether this illustrates “that free trade is primarily about collaborating and sharing? Hasn’t free trade shown that it holds great power for expanding, connecting, and shaping a global community?”

Or as Kevin Schmiesing has put it, “No Man is an Economic Island.

With health care moving back to center stage in Washington, we’re publishing Dr. Donald Condit’s Acton monograph A Prescription for Health Care Reform as a free eBook readable in a variety of formats. This excellent work continues to be available for $6 (paperback) in the Acton Bookshoppe.

For your free eBook, visit Acton’s Smashwords page. The Condit book will soon be available in the Kindle store (no charge for that, either) and in other eBook retail sites. We’ll keep you updated when they become available.

Via Smashwords, you can download digital versions of the 81-page health care monograph for eBook readers, smart phones and computer screens.

The monograph was released before the passage of the Patient Protection Act in March. Dr. Condit has recently authored an update in the November 2010 issue of the Linacre Quarterly, published by the Catholic Medical Association. The medical association has graciously offered readers of the Acton PowerBlog an open link to Dr. Condit’s new article, “Health-Care Counter-Reform.”

The Jan. 5 Acton commentary was based on the Linacre article. Read “Obamacare and the Threat to Human Dignity” by Dr. Donald Condit.

The latest issue of the Journal of Markets & Morality (13.2) is now available online to subscribers. This issue features a fine set of articles from Manfred Spieker, Gregorio Guitián, Joseph Burke, and Jim Skillen. It also has the usual range of book reviews, so ably overseen by the journal’s book review editor Kevin Schmiesing.

This issue also has two special features. The first is a controversy between Jonathan Malesic, assistant professor of theology at King’s College in Wilkes-Barre, Pennsylvania, and the author of Secret Faith in the Public Square: An Argument for the Concealment of Christian Identity (Brazos Press, 2009), and Hunter Baker, associate dean of arts and sciences at Union University in Jackson, Tennessee, and the author of The End of Secularism (Crossway, 2009). In a lively and wide-ranging discussion, Malesic and Baker debate the question, “Is Some Form of Secularism the Best Foundation for Christian Engagement in Public Life?”

The other special feature in this issue is our second occasional installment of the Status Quaestionis. Conceived as a complement to our Scholia, which are original translations of early modern texts and treatises on ethics, economics, and theology, the Status Quaestionis features are intended to help us grasp in a more thorough and comprehensive way the state of the scholarly landscape with regard to the modern intersection between religion and economics. This Status Quaestionis is an original translation of a piece by the Dutch theologian Herman Bavinck (1854-1921), “General Biblical Principles and the Relevance of Concrete Mosaic Law for the Social Question Today.” This piece was written by Bavinck for the First Social Congress in Amsterdam in 1891. This congress is famous for its opening address, given by the Dutch neo-Calvinist theologian and statesman, Abraham Kuyper (available in translation as The Problem of Poverty). John Bolt, professor of at Calvin Theological Seminary and editor of the four volume English edition of Herman Bavinck’s Reformed Dogmatics (Baker Academic, 2003–2008), provides an extensive and insightful introduction to Bavinck’s essay and the broader context of European Christian social thought in the latter half of the nineteenth century.

This issue of the journal also marks the end of the tenure of the journal’s founding executive editor Stephen Grabill, who now is director of programs at the Acton Institute and editor emeritus of the journal. Here is an excerpt from my editorial (PDF):

Dr. Stephen Grabill’s time as editor of the Journal of Markets & Morality has been characterized by close editorial care and precision, a commitment to responsible scholarly expression, and innovation in terms of content and delivery. At the close of his time as executive editor, Dr. Stephen Grabill is most deserving of the “well done” said to a “good and faithful servant” of freedom and virtue (Matt. 25:31).

Dr. Grabill’s farewell editorial is also available and worth reading as a retrospective on the journal’s first thirteen years of publication (PDF).

Given the journal’s ongoing policy of distinguishing between current issues (the two latest issues) and archived issues (which are freely available), this means that issue 12.2 is now fully and freely available to the public.

For access to the two current issues, including the newly-released 13.2, I encourage you to consider subscribing as an individual as well as recommend that your institution subscribe to the Journal of Markets & Morality.

A popular citation of Martin Luther King, Jr.’s justly-famous “Letter from Birmingham Jail” is his reference to natural law and Thomas Aquinas:

How does one determine whether a law is just or unjust? A just law is a man-made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law. To put it in the terms of St. Thomas Aquinas: An unjust law is a human law that is not rooted in eternal law and natural law. Any law that uplifts human personality is just. Any law that degrades human personality is unjust.

The Witherspoon Institute has announced today its project, “Natural Law, Natural Rights, and American Constitutionalism,” which “will serve as an online resource center for students, teachers, and educated citizens to learn about the intellectual traditions of natural law and natural rights, particularly within American political and constitutional history.”

The current list of essays by contributors is expansive and impressive, and includes an essay by Acton’s own director of research Sam Gregg, “Natural Law and the Law of Nations.” Be sure to check out this resource from the Witherspoon Institute. I’m eager to see how the site develops and grows. I’m also interested in seeing who will write the currently missing essay (or set of essays) on the Reformation and natural law (including modern Protestantism and natural law). Sigmund’s essay currently covers the period, but much more needs to be said.

Currently the “Early Modern Liberal Roots of Natural Law” primary source section includes Locke, Hobbes, and Montesquieu. This is of course an important stream of natural-law thinking in the early modern era, but hardly the only one and certainly not the only one with later influence.

Additionally, to be of more scholarly use, I think the primary source collection should point toward digitally-accessible forms. I talk about this in the context of theology and economics in an editorial in the latest issue of the Journal of Markets & Morality, “Printed Source and Digital Resource in Economics and Theology” (PDF), and point especially towards the example of the Post-Reformation Digital Library (see, for instance, the pages on Locke and Hobbes).

This is the Acton Commentary for January 12.

“Americans of all ages, all conditions, and all dispositions constantly form associations,” wrote French observer Alexis de Tocqueville in the 1830s. “If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society.” Could this organizing spirit hold the potential to transform the nation’s health care?

With the House in Republican hands, it appears that the 2010 Patient Protection and Affordable Care Act will be at least in part modified. Undoing the most ill-considered pieces of the bill would be good, but the need for reform remains. Americans’ dissatisfaction with the existing system gave impetus to change in the first place; going back to the status quo ante is not advisable.

As is often the case, a crucial aspect of health policy reform is recognition that government policy, no matter how brilliant, cannot solve all of our problems. For example, one vital step on the path toward a healthier America is reigniting a sense of personal responsibility for health-affecting decisions. Policymakers can promote but not ensure progress toward this goal. The recent successes of some small town initiatives demonstrate how voluntary associations can play an important role.

Nevada City, Calif., resident Carole Carson created the Nevada County Meltdown to encourage and assist people in her community who wished to lose weight. Working from her own experience of the necessity of support from family and friends, Carson and fellow organizer Mike Carville set up a contest where teams competed to shed pounds.

The whole community backed the effort. Health professionals offered services such as blood pressure checks. Restaurants implemented low-calorie menus. Groups organized walks and other fitness activities. Healthy living became a common goal, its benefits extending beyond physical wellbeing. “The most important thing about it,” observed one participant, “was that it was such a fabulous community thing.”

Other towns that imitated Nevada City’s program achieved similarly edifying results. In Fossil, Ore., some weight loss contestants’ health improved so dramatically that they were able to avoid pending orthopedic surgery and discontinue insulin shots for diabetes.

The medical costs of obesity amounted to $147 billion in 2008, according to one study. Chronic illnesses such as diabetes consume 75 percent of the more than $2 trillion that Americans spend on health care. Many of these diseases, writes Dr. Donald Condit in A Prescription for Health Care Reform, are “influenced by modifiable risk factors.” Lifestyle changes that prevent or reverse such conditions are critical to reining in health care spending, not to mention improving the quality of life for those who are affected. The trick is motivating people to change.

Some government programs might help, but the more effective approach is the one taken by these communities, because it is based on a realistic understanding of human nature. “We’re social animals,” Carson says. “We have a profound impact on each other—for good or ill.”

This impact is most profound when it does not occur through compulsion of one sort or another (as government programs usually do) but when it employs a subtler array of social influences. When family members, friends, co-workers, and community leaders promote a cause or, better yet, demonstrate in their own lives the benefits of living a certain way, we are encouraged and potentially persuaded to emulate their actions. When we are compelled to do something, our natural reaction is to seek ways to circumvent requirements. When we are persuaded, we view the decision, the effort—and the accomplishment—as our own.

The experience of one man in the town of Albert Lea, Minn., confirms the range of benefits possible when a community unifies around the mission of health. After he joined a neighborhood walking team, he pulled out of depression, lost weight, and went off his diabetes medication. “It wasn’t just the walking,” a town official says. “It was the caring.”

This kind of health care reform can’t be orchestrated by policy experts in Washington. Yet it would go a long way toward solving the systemic problems that have proved so nettlesome to lawmakers, whose search for solutions usually overlooks the potential inherent in every village and neighborhood in America.