In this week’s Acton Commentary, I discuss whether the Environmental Protection Agency’s planned regulation of carbon emissions can be justified from a Christian perspective.  The EPA has found that carbon emissions endanger “public health and welfare,” and it is on track to begin regulating vehicle and power plant emissions.

Environmentalists claim that policies targeting carbon emissions, such as EPA regulation or a cap-and-trade program, will stimulate the economy by creating green jobs.  Unfortunately, this is not the case – the government does not have the ability to create jobs.

Rather than stimulating the American economy, full regulation of carbon emissions will damage it severely.  Essentially, a cap or a regulatory burden on carbon emissions would create energy scarcity, making it just as expensive to purchase energy from fossil fuels as it is to purchase energy from “renewable” sources.  The supply of efficient energy would drop in order to encourage production and consumption of inefficient energy, and prices would skyrocket as a result.

Barack Obama himself admitted, as a presidential candidate, that rising energy prices form a crucial component of emissions regulation.

It’s not just energy prices that will rise.  Prices for virtually all other goods and services will rise as well, because it takes energy to produce them.  It takes energy to get a vegetable from a farmer’s field to your kitchen table.  It takes energy to plant the vegetable, cultivate it, harvest it, transport it, keep it fresh, sell it in a lighted grocery store, drive it from the grocery store to the house, and cook it.

If energy expenses increase at every stage of the vegetable’s journey, what will happen to the price of the vegetable?  It will rise.  And rising prices will have the worst impact on the poor.  Before Christians jump on the bandwagon of carbon politics, they would do well to think through not just the good intentions of climate policy, but the real-world consequences.

Read “In the ‘Green’ Economy, the Poor Pay More” on the Acton website.

On the National Catholic Register, Andrew Abela confesses to a “nagging suspicion that teaching business ethics in a university is not delivering on what is expected of it.” The question is both concrete and academic: Abela is the chairman of the Department of Business and Economics at The Catholic University of America and an associate professor of marketing. He was awarded the Acton Institute’s Novak Award in 2009. Here, he explains the problem with “amoral” business attitudes:

… we often face the problem that in our business ethics course, we teach students to respect human dignity, but then in marketing, they are taught to sell as much stuff as possible regardless of the good of the consumer; in finance, to maximize profits above all else; in economics, that human beings are nothing more than utility maximizers who find their happiness by consuming more and more stuff. Not explicitly, perhaps. But implicitly, that is the message they get from these courses.

If, after you graduate, real life presents any tension between the lessons you learned in your business ethics course and the lessons from your finance (or marketing or management) course, guess which is more likely to win? “I’ve got to do my job,” our graduates think, “and my job is finance”; therefore, I do what my finance class taught me.

The difficulty here is that when business runs this way, according to supposedly amoral theory, we invariably end up with the greed-induced global malaise we are facing now. Why? Because “amoral” business leads to immoral business: Without a strong notion of the good built into our concept of business, without a strong ethical foundation within the theory, business theory cannot provide sufficient protection from temptation. If businesses were run by machines, we might have such a thing as an ethically neutral business theory. But businesses are run by human beings who suffer from original sin and are therefore susceptible to temptation.

Read “Will Teaching Business Ethics Make Business More Ethical?” on the website of the National Catholic Register (reprinted from Legatus Magazine).

Last month, in “Europe’s Choice: Populate or Perish,” Acton Research Director Samuel Gregg observed:

At a deeper level … Europe’s declining birth-rate may also reflect a change in intellectual horizons. A cultural outlook focused upon the present and disinterested in the future is more likely to view children as a burden rather than a gift to be cared for in quite un-self-interested ways. Individuals and societies that have lost a sense of connection to their past and have no particular interest in their long-term destiny aren’t likely to be worried about a dearth of children. Here Europe’s generation of 1968—which promoted a radical rupture with the past and is intensely suspicious of anything that might broaden people’s outlooks beyond the usual politically-correct causes—has much to answer for.

In “America’s Parent Trap,” Washington Post columnist Robert J. Samuelson picks up the same theme noting that, “Our society does not — despite rhetoric to the contrary — put much value on raising children.” He takes a closer look at tax policy, among other factors, and the way it financially punishes parents.

While having a child is a deeply personal decision, it’s also shaped by culture, religion, economics and government policy. “No one has a good answer” as to why fertility varies among countries, says sociologist Andrew Cherlin of Johns Hopkins University. Eroding religious belief in Europe may partly explain lowered birth rates. In Japan, young women may be rebelling against their mothers’ isolated lives of child-rearing. General optimism and pessimism count. Hopefulness fueled America’s baby boom. After the Soviet Union’s collapse, says Cherlin, “anxiety for the future” depressed birth rates in Russia and Eastern Europe.

In poor societies, people have children to improve their economic well-being by increasing the number of family workers and providing support for parents in their old age. In wealthy societies, the logic often reverses. Government now supports the elderly, diminishing the need for children. By some studies, the safety nets for retirees have reduced fertility rates by 0.5 children in the United States and almost 1.0 in Western Europe, reports economist Robert Stein in the journal National Affairs. Similarly, some couples don’t have children because they don’t want to sacrifice their lifestyles to the time and expense of a family.

We need to avoid Western Europe’s mix of high taxes, low birth rates and feeble economic growth. Young Americans already face a bleak labor market that cannot instill confidence about having children. Piling on higher taxes won’t help. “If higher taxes make it more expensive to raise children,” says demographer Nicholas Eberstadt of the American Enterprise Institute, “people will think more about having another child.” That seems common sense, despite the multiple influences on becoming parents.

Read Samuelson’s column on the Washington Post website.

On the new Reclaiming the Culture radio show, host Dolores Meehan recently interviewed Acton President Rev. Robert A. Sirico on the subject of “The Principle of Subsidiarity and the Service to the Poor.” Here’s how Meehan describes the show’s mission:

Bay Area Catholics are some of the strongest Catholics in the country. Reclaiming the Culture grew out of the desire to show that the Catholic Church in the Bay Area has the resources to confront the prevailing secular culture. Our purpose is to introduce great thinkers to listeners who may not have the opportunity to pursue an authentic, classical, Catholic education at, say, the Dominican School of Philosophy and Theology in Berkeley. We see this as a chance to share the wisdom of the Catholic Church, which is far greater than many people realize, and is easily up to the task of engaging the prevailing secular culture. We want to move beyond catechesis and apologetics, important as they are, and enter into the arena where faith meets reason.

Click on the audio player below and listen to the interview.

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Join us on Thursday, August 12, at Derby Station in Grand Rapids as we continue our Acton on Tap series, a casual and fun night out to discuss important and timely ideas with friends. The event is scheduled for 6:00 pm to 8:00 pm and discussion starts at 6:30.

American Exceptionalism is a newsworthy topic as some on both the political left and right lament that America’s greatness is slipping away. But what does American Exceptionalism mean and how did the idea take root? What are some of the thoughts of those who say American Exceptionalism is a dangerous myth? What are the religious connections to the idea? Ray Nothstine will offer some remarks on the topic related to American history, theology, the presidency, military history, morality, and economics. But this is really a topic that call for a lot of friendly discussion from the attendees so he promises to keep his thoughts short. We want to hear from you.

Find the Facebook Event Page.

It’s worth noting that the original context of engagement of the ecumenical movement by figures like Paul Ramsey and Ernest Lefever (two voices that figure prominently in my book, Ecumenical Babel) had much to do with foreign policy and the Cold War, and specifically the question of the proliferation of nuclear weapons.

Last week marked the anniversary of the bombing of Hiroshima and today is the anniversary of the Nagasaki detonation. As ENI reports (full story after the break), the ecumenical advocacy against nuclear weapons has not abated since the 1960s.

The question of nuclear weapons is a complex one, that involves distinctions between ius ad bellum and ius in bello, strategic and tactical nuclear devices, and combatants and non-combatants. Kishore Jayabalan has also made the case that we also need to distinguish between different kinds of regimes.

It may well be that the question of nuclear weapons is analogous to the question of capital punishment: the government might well have the theoretical right to prosecute it, but given the practical limitations of human fallibility, there may be no morally-sound way to practically implement it.

As Paul Ramsey wrote of the nuclear question in 1967, however, the position that it is acceptable to possess the weapons only on the condition that they never be used is incoherent:

The actuality of deterrence depends upon a credible belief, mutually shared, that one might use a nuclear weapon. If the government of one of the great powers were persuaded by the churches never to be willing to use any nuclear weapon under any circumstances, and this were known, there would be instantly no deterrence and therefore no practical problem of finding a way out. Likewise, the morality of deterrence depends upon it not being wholly immoral for a government ever to use an atomic weapon under any circumstances.

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The most basic lesson of all of the various efforts, by both state and federal governments, to provide incentives for films to be made is that with government money comes government oversight.

Once you go down the road of filing for tax credits or government subsidy in various forms, and you depend on them to get your project made, you open yourself up to a host of regulatory, bureaucratic, and censorship issues. It shouldn’t be a surprise, for instance, that states might only want to reimburse those films that project an image of their state in a complimentary light.

The Michigan film bureaucracy has become infamous, selective, and capricious; you hear stories of corruption, by both government departments and those seeking the credits.

John Stossel examines some of the regulatory and economic issues surrounding film incentives.

Why not just have a free market for films? To do otherwise is to court government censorship or propaganda, neither of which should be an attractive option for filmmakers.

If you want to retain creative control and avoid the insidious influence of government oversight, then don’t take money from the government to make your “art.”

This is perhaps at its most compelling when you have Christians who are trying to genuinely trying to integrate an authentic sense of faith into their films.

Should the government be given a say, either directly or indirectly, in what such filmmaking looks like?

This August 3 Wall Street Journal article is based on a Legatum Institute survey comparing Indian and Chinese entrepreneurship and raises important issues about the roles of the state and the family in promoting entrepreneurship.

The common elements between Indian and Chinese wealth-creators are their optimistic view of the future, compared to Americans (“Why I’m Not Hiring”) and Europeans (“Everything’s Fine With Greece, Just Ignore Some Facts”) presumably, and their lack of concern about the impact of the global financial crises on their businesses.

But Indians and Chinese differ widely on why they become entrepreneurs in the first place, where they look for capital, and whether they look to the state to support and encourage them. As the article’s subtitle puts it, “Indians believe they succeed despite the state. The Chinese say they succeed because of it.”

I draw two conclusions from the study: Those who favor freedom, creativity and self-employment seek limited government, while those who seek greater wealth for its own sake are seemingly indifferent about the size and scope of government. And greater trust in the family seems to go along with less trust of the state.

It follows that friends of freedom and the family ought to favor the Indian to the Chinese version of entrepreneurship.

As Kishore Jayabalan noted yesterday, the fallacy of “broken windows” is, unfortunately, ubiquitous in discussions of public finance and macroeconomics. Though we are told that government spending and public works have a stimulating effect on economic activity, rarely are the costs of such projects discussed.

Such is the case with several stimulus projects in my own hometown of Atlanta, GA. The Atlanta Journal-Constitution reports on a list that Sen. John McCain and Sen. Tim Coburn drew up, criticizing wasteful stimulus projects throughout the country:

Their list includes Georgia Tech professors who received federal stimulus funds to understand how jazz, avant-garde art and Indian classical musicians improvise. The report cites an Atlanta Journal-Constitution article that describes the $762,372 study, which involves using brain imaging to learn how musicians do their work.

[....] The senators also highlighted a $677,462 research project at Georgia State University to study “why monkeys respond negatively to inequity and unfairness.” Asked about the project, the university sent the AJC a news release from last year that said the research “will hopefully answer questions about the evolution of responses to reward inequality — including those responses in humans.”

Georgia Tech has fired back:

Georgia Tech issued a statement in response, saying such research is “necessary for the long-term economic success of our state and our nation.”

But how can one verify such claims? As Kishore has pointed out, the mere fact that money is being spent is not enough to claim that the economy benefits from such expenditure. The hidden costs of stimulus money are the jobs and services that would have otherwise been funded by the private sector.

In order to actually determine whether an investment is truly beneficial to the economy, one must be able to subject it to the cost-accounting of profit and loss. A product or service that makes losses has consumed resources that could have otherwise been put to more productive uses in the economy. But since government expenditures are funded not through any kind of voluntary market exchange, but through taxation, this kind of mechanism cannot be used to evaluate them.

So we can be pretty sure that stimulus projects, in fact, are not as conducive to economic growth as we have been led to believe, since such projects would probably not withstand the profit-and-loss test of the market.

But this is not to say that funding any of this kind of scientific research is not worthwhile. Activities such as philanthropy and charitable giving do not produce any kind of profitable return, but are nevertheless recognized as noble and praiseworthy. There may be good reasons for funding these projects, but economic growth is not one of them.

Chinese Communism is no longer about ideology.  Now it is about power.

I reached this conclusion on the basis of six months spent in China and extensive conversations with my Chinese friend and fellow Acton intern Liping, whose analysis has helped me greatly in writing this post.

China began moving away from Communist ideology under Deng Xiaoping, whose economic reforms disassembled communes and created space for private businesses.  He justified these reforms to his Communist colleagues with the saying, “It doesn’t matter if the cat is white or black as long as it catches the mice,” implying that even “capitalist” policies were justified if they succeeded in bringing economic growth.  And they certainly did.  Since that time, China’s economic development has been tremendous, so now Chinese people overwhelmingly approve of the reforms.

Despite the success of the opening of China’s markets, the country has not completely embraced free enterprise.  The PRC’s 60th anniversary celebration last fall featured signs boldly proclaiming, “Socialism is good.”  The government still controls key industries such as oil and runs enterprises in many other industries.

Further, all land in China is owned by the government.  Home buyers are technically only leasing land for 70-year periods, a policy established assuming that by that time, the houses will need to be rebuilt anyway.  The government sometimes sells land inside cities to developers for vastly inflated sums of money, evicting the people who already live there.  The remuneration that these people receive is frequently less than the value of the house, forcing them to find inferior housing elsewhere.  These policies have made housing within cities prohibitively expensive for most Chinese people, forcing them to commute from the suburbs.

Despite these continued regulations, economic freedom in China has made significant advances compared to its previous completely collectivized state.  Enterprise is permitted and even encouraged, as is trade with the outside world.  As people come to recognize the benefits of free markets, more and more are becoming eager to participate, which will make it much more difficult for the government to restrict these freedoms again in the future.

However, this economic freedom does not imply political freedom.  Deng Xiaoping, the same leader who had spearheaded the economic reforms, was responsible for the Tiananmen Square crackdown on protesters for political reform.  That incident twenty years ago is only one of the better-known examples of the political suppression that still occurs today.

The government holds a monopoly on the media, dominates the flow of information, and censors any ideas it finds potentially threatening.  It blocks access to web sites that range from information on tense political issues to social networking sites like Facebook and YouTube.  When I was studying there, during a one-on-one session a teacher asked me what I knew about the Tiananmen Square massacre, admitting that due to censorship I probably knew more about it than she did.  When we had finished the discussion, she erased all relevant vocabulary from the board, saying that she didn’t want anyone to know what we had talked about.  Through the high school level and frequently afterward, students are indoctrinated with Marxist philosophy, and studies of literature are focused exclusively on nationalistic or patriotic themes.  Political dissent is strictly censored, and dissenters are often denied work or restricted from moving or publishing their work.

According to Liping, most new members of the Communist party do not actually believe in Marxism; they just see membership as a way to improve their chances of finding a good job.  Similarly, officials suppress opposing ideas, not because they are persuaded of the truth of Marxism but because they want to prevent dissent and opposition to their own party. Promoting Marxist ideas serves as a way to silence political rivals and to enforce popular support for their own rule.  The first Chinese communists sought power to serve their ideology, but today’s Chinese communists use ideology to preserve their power.

The expansion of economic freedom coupled with the continued political repression may seem like a contradiction, and indeed areas with more trade connections like Shanghai also have more political freedom than government centers like Beijing.  Yet fundamentally, this paradox exists because of the shaky foundation for what freedom they do have.

Deng Xiaoping’s justification for moving away from Communist economic ideology was based solely on pragmatic reasoning.  He figured that since the Communist system was failing miserably, changing economic systems might bring prosperity, a prediction that has been proven true.  Yet abandoning the one-party state did not have any such obvious benefits.  In fact, retaining a monopoly on political power was in the leaders’ personal interest.  They could even argue that it was good for the nation, creating what current president Hu Jintao euphemistically calls a “Harmonious Society” unified by common political beliefs.

In the West, arguments for freedom are closely tied to belief in individual rights which the government cannot legitimately violate.  These beliefs originated in the Christian view that people have special dignity because they are made in the image of God.  This foundation means that even if it would be expedient for the government to restrict freedom, it has no right to do so.  Officials may not always act to preserve the people’s freedom, but in violating freedom, they behave inconsistently with their own ideals.

In contrast, the Chinese Communist Party is consistent in pragmatically following policies that they think will be beneficial, whether they increased freedom or not.  Freedom can bring tremendous practical benefits, which is what one would expect of a concept based on a true vision of human nature.  Yet these practical benefits alone do not constitute freedom’s foundation.  The freedom the government gives pragmatically, it can take away when freedom is no longer practical, or when the benefits it provides are less obvious.

Thus, what China lacks is not merely policies that allow people to act freely but an understanding of the essence and importance of freedom.  Freedom cannot be guaranteed by government pragmatism, but only by a genuine understanding of the rights of the people within the country, coupled with leaders who are willing to restrain their desire for power in order to respect these rights.