Archive for June, 2010
Throughout my childhood I was taught to live honestly, work hard, and pursue my dreams. It always seemed pretty generic. After all, it’s sort of the American disposition, which is probably why I never thought to question it.
That is, until I went to college.
From the start of my freshman year, I was bombarded by claims that capitalism was “immoral” and that the pursuit of happiness was selfish, materialistic, and possibly evil. Life was no longer about honing your free will or achieving your dreams, but about outsourcing such “burdens” to the benevolent State.
I had always believed that free enterprise was just and moral simply because it made sense. But here I was, surrounded by smart people, being asked to defend my political beliefs on moral grounds. I didn’t necessarily think I was wrong, but I felt stunned, overwhelmed, and confused.
I found myself in the middle of a moral struggle.
It is this type of struggle that Arthur Brooks hopes to capture in his new book, The Battle: How the Fight Between Free Enterprise and Big Government will Shape America’s Future.
Although such struggles have been going on since the beginning of time, Brooks sees a distinct battle over free enterprise taking place at the forefront of our current political discourse. Now is the time, Brooks believes, for the free enterprise movement to face its enemy (“big government”) head on.
Brooks, who is president of the American Enterprise Institute, is no stranger to discussions of morality and public policy. His previous two books (Who Really Cares? and Gross National Happiness) closely examine such issues with specific focuses on charity and happiness, but this time around, Brooks is not interested in mere social analysis. Above all, The Battle is a call to action.
Brooks begins by diagnosing the country, which he believes is in the middle of an aggressive culture war over the fate of the free enterprise system. Although he claims that the movement retains a vast majority of the American people (approximately 70 percent), Brooks is convinced that the remaining 30 percent have gained the moral high ground and have thus been able to seize the reins of policymaking.
Brooks then moves on to a dissection of the (very) recent financial crisis — a particularly good specimen for showing how capitalism can be wrongly accused (especially on moral grounds). Brooks walks the reader through what he calls the “Obama narrative” of the crisis, pointing out each distortion and fallacy along the way (and there are plenty).
Brooks believes that through a mix of misplaced good intentions, lust for power, and good old-fashioned hypocrisy, the free enterprise movement has Read the rest of this entry »
Wealth [not earned but] won in haste or unjustly or from the production of things for vain or detrimental use [such riches] will dwindle away, but he who gathers little by little will increase [his riches].
This would apply to plenty of other get-rich-quick-schemes, but our country seems to have bought into the faulty Keynesian notion that the government can cure bad decision-making by centralizing it.
In short, the government’s attempts to “create” wealth amount to what Solomon calls “wealth won in haste.” Governments are certainly capable of using some funds wisely, but this is rarely the case. Plenty of Keynesians would say this is primarily about stabilization, but even if that’s true, what are we trying to stabilize?
In the end, ours is a system that is overspent and spoiled.
Basically, there isn’t much point to “stopping the bleeding” when the body has too much blood in the first place. (Yes, it’s a problematic metaphor to begin with, but that’s my point.)
What I want to get across is that most long-term economic improvement takes time. There will be economic booms and times of rapid expansion, but that usually has to do with incremental (read: “little by little”) improvements made among free individuals.
Bolstering trade and innovation may not be as Read the rest of this entry »
When the environment gets neglected, we hear that government needs to take action. When the economy goes down the tubes, we are told that bureaucrats must come to our rescue.
But for Evans Githinji, a 32-year-old entrepreneur in Kenya, achieving prosperity and exhibiting proper stewardship is simply a matter of imagination and initiative. Kenya’s economy is far from thriving, yet Githinji has found a way to both curb environmental harm and bring value to his economy despite his disadvantages.
Hear his story here:
As the video tells us, Githinji’s efforts have led to the opening of 23 collection yards, each of which employs 100 youths in collecting plastic bags.
“I feel great,” says Githinji. “And I feel I’m doing something good for this nation.”
But would it have been better if the Kenyan government had stepped in long ago? Would it have been more efficient if taxpayer money had been poured into dumptrucks and garbage collectors? Would the government have a better grasp on wage rates than Githinji does? Would it be better for Kenyans if the government banned Read the rest of this entry »
Let’s say there’s an apple. I want to eat the apple and you want to eat the apple. Both of us can’t eat the same apple. We can divide it. We can determine who is more hungry. We can figure out who is willing to pay a greater price for it. We can find out who wants the core and who wants the seeds. But no matter how much we deliberate, we cannot share the apple in its entirety.
Economics used to be about how to distribute the apple most efficiently, but the world is changing. Although physical resources remain scarce, human innovation has flourished to the point where we can do much more with much less, and few have bothered to explain how or why.
Arnold Kling and Nick Schulz try to tackle this phenomenon in their new book, From Poverty to Prosperity: Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity. In the book, the authors try to grasp this new way of thinking by terming it Economics 2.0. Where Economics 1.0 saw the market as a means for allocating scarce resources (e.g. apples), Economics 2.0 sees the market as a mechanism for channeling innovation and triumphing over scarcity.
In the beginning of the book, the authors use laundry (of all things) to illustrate the difference. Economics 1.0 would try to explain how it might be more efficient for you to outsource your ironing to someone else. Economics 2.0, on the other hand, doesn’t look at the tangible items in the equation (the number of shirts, the cost of an iron, the cost of dry cleaning, etc.). Instead, Economics 2.0 is primarily concerned with the potential for innovation. For example, what about permanent press? What about wrinkle-free shirts?
As the authors explain:
Thanks to technical progress, many shirts today do not need to be ironed at all. Perhaps in another decade or two they will not need to be washed. Given the likely progress of nanotechnology, there is a good chance that shirts manufactured in 2020 will be ‘permanent clean.’ That’s Economics 2.0.
Another way to look at this is through what Kling and Schulz call the “software layer” of an economy. While Economics 1.0 is concerned with tangible inputs like labor and capital, Economics 2.0 is concerned with the intangible factors, such as collective intelligence, the existence of property rights, and levels of corruption. You can have all of the right hardware for a Read the rest of this entry »
Jobs has offered several reasons for this, but all of his statements seem to indicate a general desire to shape the culture of his company, as well as its consumers.
Tate began the exchange by sending Jobs an e-mail that said the following:
“If [Bob] Dylan was 20 today, how would he feel about your company? Would he think the iPad had the faintest thing to do with ‘revolution’? Revolutions are about freedom.”
Surprisingly, Jobs actually responded to Tate’s e-mail, and his response included this jab:
“Yep, freedom from programs that steal your private data. Freedom from programs that trash your battery. Freedom from porn. Yep, freedom. The times they are a changin’, and some traditional PC folks feel their world is slipping away. It is.”
There are plenty of interesting facets to this situation — particularly regarding the recent goings on between Apple and Adobe — but what I want to focus on is Jobs’ statement about “freedom from porn.” What strikes me is that it echoes a Biblical concept that plenty of Christians don’t even grasp. I doubt that Jobs is rooting his worldview in the Bible (he’s a Buddhist), but I think it’s encouraging to see such a prominent figure making these arguments.
Many “liberation” types argue that freedom means the right to do anything you want, which may be true from a purely literal perspective. But holistically speaking, the Bible depicts freedom as something a bit more complex. In the Bible, real freedom isn’t as much about Read the rest of this entry »
If you haven’t heard yet, Republican candidate Rand Paul made some controversial remarks about the Civil Rights Act of 1964. Paul’s basic argument was that we should prohibit racial discrimination by the government, but we should not intrude on the right of private businesses to practice bigotry.
The media firestorm over Paul’s comments seems to have subsided (for now), but the massive reaction affirms how many people believe it is the role of the State to be the sin police.
Pastor and theologian Douglas Wilson was recently asked to comment on the controversy, and his response brings up many issues worth thinking about.
Watch the video of his response here:
Wilson begins by saying the reaction and hype was spawned by a root problem in our society:
The problem that plagues us in our political discourse is that we don’t understand the difference between sins and crimes.
What Wilson means is that we always rush to pass laws to prohibit things we don’t approve of. For Wilson, this common perspective comes from a misplaced worship Read the rest of this entry »
Nicholas Kristof recently wrote a column discussing an often-ignored detail about poverty-stricken cultures — that the poor are prone to the same vices as the rich.
The poorest of the world certainly don’t have much to live on — the World Bank claims it’s as little as $1 a day — but what is even more startling is how wasteful people can be when they have so little.
Kristof sums up the problem this way:
“[I]f the poorest families spent as much money educating their children as they do on wine, cigarettes and prostitutes, their children’s prospects would be transformed. Much suffering is caused not only by low incomes, but also by shortsighted private spending decisions by heads of households.”
We often hear about how the West is prosperous because of unfettered greed, but what many fail to see is how greed is an inherently human characteristic that rarely leads to any sustainable good.
Kristof provides several instances where the extremely poor choose to put self-indulgent (and self-destructive) habits in front of basic necessities (e.g. education, mosquito nets, medicine, etc.). For one Congolese family, the Obamzas, the father chooses to spend $12 a month on alcohol rather than pay $2.50 a month for each of his children’s school tuition. He also refuses to pay $6 for a mosquito net, even though two of his children have already died from malaria.
In this case, it appears that irrational self-interest is the primary culprit. The socio-economic conditions of the Congo Republic are bad enough as it is, but here we can see how one man’s greed is Read the rest of this entry »