Posts Tagged free market
Last week at the Acton Institute’s PowerBlog, I offered some suggestions as to what a newly elected President Obama might do if he wishes to unify the country and restore American confidence — namely, affirm the value that each person brings to the table, male or female, rich or poor, and “appeal to more than material welfare,” as President Coolidge once did.
This week at AEI’s Values and Capitalism, I discuss how we as Christians should respond after the election—but regardless of what the President does or doesn’t do.
For this, I rely heavily on economist Russ Roberts, who recently reminded us that politics isn’t “where life happens,” and thus, we should remember that our best opportunity to sell a political ideology of individual liberty is by building and cultivating the very communities and institutions — the “voluntary emergent orders” — we seek to protect.
As Roberts writes:
My other source of cheer is to remember that politics is not where life happens. Policies affect our lives, but we have much to do outside that world. Yesterday I helped my youngest son learn Python, learned some Talmud, played with my photographs on Lightroom, had dinner with my wife, and went shopping with my oldest son for his first nice blazer. Lots of satisfactions there. Nothing to do with politics.
Toward the end of the campaign, I saw an ad where Obama looked into the camera and said something like “look at my policies and those of my opponent and decide which one is best for you.” Those of us who believe in voluntary emergent order and civil society as a way to make the world a better place, reject Obama’s calculus. We believe that our policies aren’t just good for ourselves but allow everyone to reach their potential and serve others through the marketplace and the communities we choose to join and build. That’s a world I want not just for my children to but for your children, too. Being nice to your neighbor helps your neighbor imagine the possibility that the policies we pursue are not just about ourselves.
For both the Christian and the Jew, this “voluntary emergent order” begins with loving God and loving neighbor. We certainly need to make clear the state’s persistent attempts to intrude and subvert that order, but throughout such a struggle, particularly after a battle as aggressive and exhausting as this past election, we would do well to re-energize ourselves when it comes to pursuing the very callings and Read the rest of this entry »
In light of my recent posts on the inadequacy of fair trade (1, 2, 3 & 4), I thought this recent debate on the topic was well worth sharing. The discussion includes AEI’s Claude Barfield, World Fair Trade Organization’s Paul Myers, and Henderson State University’s Victor Claar.
Watch it here:
Barfield provides a good historical backdrop, but Claar, whose comments begin at 33 minutes, provides a strong and thorough critique of fair trade’s failures in both fairness and economic results.
Some of my favorite lines from Claar, in no particular order:
- “The fairest trade of all is trade that is genuinely free—free from political logrolling by politicians desperate for votes, free from opportunistic lobbying by industries like U.S. sugar and cotton, and free from the harm to the global poor that well-intentioned rich Northerners like us can sometimes bring.”
- “When the price of something is low–like coffee, or sugar, or cotton–market forces normally direct people to make less of it and move onto something else. But fair trade interferes with the signal that prices ordinarily provide; Fair Trade can never serve as a sustainable long-term development strategy because it will never make people significantly richer than they are today.”
- “Putting at least some faith in markets to be a powerful force for change in the lives of the poor does not amount to abdicating our concern for the poor–instead opting to cavalierly put our hope in little more than faeries and magic dust. Just as we trust gravity to keeps us all affixed securely to the ground, and just as the principles of particle physics assure you that the chair you are sitting in right now will not let you slip through its seat to the floor, markets work invisibly, but in ways that we understand reasonably well…The laws of physics are part of God’s providence; so are the laws of economics. And we fail miserably in our obligations to our Creator when we ignore the fundamental truths of economics in our efforts to aid the poor—even if our efforts flow from the very best intentions.”
One other item of note is how little argumentation Myers delivers in his primary remarks, throughout which he manages to disregard economic efficiency (because the poor benefit from waste?), downplay petty old “freedom” (because the poor prefer enslavement?) and elevate “rules and regulations” (because the problem is obviously too much access to markets?)—all without providing a substantive argument for how price manipulation benefits the poor and how price accuracy (is there a better word?) hurts them. He provides plenty of anecdotes about how the poor need jobs and affordable goods (is this news?), but provides no cohesive argument for why fair trade fulfills these needs and free trade perpetuates them.
I’m guessing this lapse was largely unintentional, and that, aptly representing Thomas Sowell’s “unconstrained vision,” Myers simply assumes that the (supposed) morality of fair trade is self-evident—that those who oppose it must simply value economic efficiency over the interests of the poor (and, to be fair, some do). Thus, fluffy anecdotes and pious platitudes about the struggles of the poor suffice for a moral indictment of free trade. Unfortunately, most free traders believe what they believe precisely because they think it benefits the poor. Myers should start his argument there (when he gets around to making one).
If these assumptions about Myers’ vacuous, emotion-driven remarks are true, then Claar’s later emphasis of Matthew 22:37 is even more relevant than intended.
How do we truly love our neighbor if we are aiming only to elevate our own personal, abstract notions of fairness without checking them against reason or results? How do we truly love the Lord our God if we rely only on our “hearts” and “souls” and not also on our minds? Further, as I’ve indicated elsewhere (1, 2, 3), what does it say about our “hearts” and “souls” if they are detached from an intentionally holistic love of God that looks beyond earthly emotions and assumptions?
Jordan Ballor wrote a marvelous piece for Comment Magazine highlighting some of the key areas of tension between pro-globalization “market conservatism” and the more localism-driven “communitarian conservatism.”
Conservatism at its best recognizes the fundamental relationship between appreciation for markets and economic freedom on the one side, and morality and social responsibilities on the other. Far from a temporary alliance, this deep and real connection guarantees that the essence of the fusionist program, despite calls to the contrary, will continue to animate the future of conservative social thought.
Yet, as is evident throughout the piece, the connection is not so clear to some, and although divisions exist on both sides, Ballor spends much of his time focusing on the concerns of the communitarian side, pointing to the ways in which markets can and should be oriented toward the common good.
To illuminate some of the core problems of the localist framework, Ballor sets his sights on conservative journalist Rod Dreher, whose radical shift to a small-town lifestyle was recently showcased by David Brooks, and whose popular book, Crunchy Cons, “includes a ten-point ‘Crunchy Con Manifesto,’ with propositions like, ‘Small, Local, Old, and Particular are almost always better than Big, Global, New, and Abstract,’ and, ‘Beauty is more important than efficiency.’” After focusing on some ironies in Dreher’s situation, most particularly his frustration with his small town’s slow internet speeds (read the full piece for more on this), Ballor observes that “even the most dedicated advocates of communitarian conservative values at some level realize that the flourishing they experience is, to a great extent, made possible by global markets.”
Here, we can see the value that each “pole” provides the other:
Business activity that provides goods and services truly is, in this way, an enterprise that does good and serves others. This is why John Wesley famously said that the “first and great rule of Christian wisdom, with respect to money,” was the dictum, “Gain all you can.” But he immediately noted that this rule was qualified: “Gain all you can by honest industry” (emphasis mine). If market conservatives help us to remember that we are to gain all we can, communitarian conservatives help us remember that we are to do so honestly, and that morality is not reducible to mere legality.
Yet for the Christian—and here is where I’m going to veer off a bit—it seems that both positions (as stated here) still lack an overarching spiritual component—namely, “gains” according to whom, and “honesty” and “morality” for what/who’s purpose? For the Christian, the market conservative’s message that “we are to gain all we can,” need not be limited to mere earthly value, and likewise, the communitarian conservative message that “we are to do so honestly” is not where our moral/theological discussions of “gains” and “values” should end.
We are fundamentally and above all else called to be oriented around obedience to God, whatever he might Read the rest of this entry »
The topics of self-interest and sacrifice are commonly discussed on this blog—my own view being that any form of either is bound to lead to selfishness unless both are aligned to God’s will (through good, old-fashioned obedience).
I’m currently reading Love & Economics: It Takes a Family to Raise a Village, in which author and economist Jennifer Roback Morse takes a unique approach to the subject, arguing that our views of “rational” man have been severely lacking on both sides (if your ideological buckets are that neat and tidy, that is).
Without incorporating love into our usual assumptions about the self and the other, argues Morse, we will structure a philosophy of life around a fantasy and be doomed to a mechanistic, regressive society.
First, the not unique part—i.e. a summary of the context:
The decentralized market economy is probably the most celebrated self-regulating social institution. Adam Smith’s “invisible hand” insight shows that people pursuing their own self-interest can actually end up furthering the public interest through no intention of their own. Since Smith’s time, free market economists have developed the Invisible Hand concept further through a construct called homo economicus, or economic man. Economic man is a rational person who calculates the costs and benefits of each potential action and chooses the action that brings him the most happiness.
The obvious problem is that we are not, and can never be, fully rational, no matter how much Ayn Rand wishes it were so (though we can certainly be more rational than we are).
On the other side is a similar problem, one which, though more obvious, is plagued by increasingly abundant misunderstanding: other people have an even smaller chance of being “fully rational” on our behalves.
The lofty bureaucrat on top of the hill may think he has a better idea than we do about the appropriate price of an orange (or a cup of coffee), but our personal preferences would likely differ if Grocer Bob had the chance to experiment. Of course, the implications lead to deeper struggles than the prices of oranges and coffee, which is why more fundamental, philosophical variations on Rousseau’s “natural goodness of man” have long served as platforms upon which many a tyrant has constructed his moralistic authoritarian palaces.
Yet even critiques of centralized approaches to knowledge and decisionmaking—Hayek’s, most notably—seem to only get us back to square one: that individual choice would be better (and it would!).
Yes, our knowledge is limited, and yes, our definitions of the “good” will not naturally conform. These are crucial realities to confront, but do they mean that Read the rest of this entry »
According to a recent survey by the Public Religion Research Institute, “a plurality of Americans believe capitalism [is] at odds with Christian values.” Among Christians in the U.S., “only 38% believe capitalism and the free market are consistent with Christian values while 46% believe the two are at odds.”
This week at Common Sense Concept, I weigh in on the results, noting first that the news is not all that surprising:
Christians are well aware that greed and selfishness are absolute sins, and we are constantly told — albeit falsely — that such sins are the very drivers of capitalism. With pro-capitalism folks like Ayn Rand affirming such myths, it’s no wonder that Christians defer to the stereotype. Such a fundamental misunderstanding comes about for a variety of reasons, but from my experience, it’s typically rooted in one or more of the following: (1) an overly simplistic and all-encompassing view of greed, (2) a materialistic view of wealth, (3) a failure to distinguish between selfishness and self-interest, and (4) a belief that God has something against material inequality.
Yet there is indeed something peculiar about all this. Most particularly: How do these Christians sleep at night if they are actively supporting a fundamentally un-Christian system?
Are they all homeless?
It is on this question that I focus the bulk of my critique:
Of the 46% of Christians who believe capitalism is “at odds” or “inconsistent” with Christian values, how many are themselves actively engaged in the capitalist system? Of the 61% of Americans who believe regulation is necessary to ensure “ethical” business activity, how many truly believe they need to be regulated in order to ethically trade an apple for an orange? Of the 55% of white evangelical Protestants who believe that income inequality is “one of the biggest problems in the country,” how many have a higher income than someone else? Indeed, if any of these folks are simply working in America today, aren’t they profiting from, indeed encouraging, the very capitalistic system that opposes their religious convictions?
Or, in shorter form:
Just as the anti-communism Christian should probably avoid the role of communist dictator or violent proletariat rebel, the anti-capitalism Christian should probably avoid the role of capitalist.
My guess is that most of these Christians are actually at peace with the capitalistic system as it plays out in their own personal lives, and I would wager that the disconnect has more to do with Read the rest of this entry »
In my most recent post at Common Sense Concept, I examine a recent attempt to prop up India’s handmade textile industry.
The IOU Project recently released an ad chock-full of economic myths and Western arrogance, urging us to buy their products and resist the almighty, domineering force of industrialization.
According to the ad, if we lose the battle against the machines, we will quickly descend into poverty, unemployment, and sameness. (LOL)
This is typical fair-trade manipulation: flooding markets that would naturally subside, retract, or level out, resulting in long-term stagnation, price confusion, and plenty of other things.
In my post, I take a look at six of the ad’s main assertions, arguing that more machinery, freedom, and energy consumption is exactly what India needs.
Here’s an excerpt of my response to the anti-machinery talk:
According to the theories in this video, we [industrialized] Westerners should be helplessly enslaved by now, forced to do the bidding of modern machinery. But perhaps we have been! Here we are, destined to work in high-rise buildings and air-conditioned offices, pining away on the internet and dabbling in ideas when we could be sewing our own clothes, hand-washing our own laundry, growing our own food, and thatching our own huts. Dang machinery!
Here’s my response on the handmade industry being (supposedly) emission free:
The cavemen of yore were certainly more environmentally friendly than we are, but they filled their days hunting for food, trying to stay warm in the winter, and hoping they’d have time to come up with a written language. Such a life might sound like paradise to the idealist sitting in the front row of Eco-Imperialism 101, but at what point are we willing to Read the rest of this entry »
First, here’s my quick re-cap of Clinton’s view, which is not particularly unique in the scope of human history:
Clinton’s main argument is that we need a society which meets all the needs of all its children (“Just imagine, bro!”). For Clinton, however, such ends are not to be reached by encouraging freedom, instilling dignity, or teaching the importance of self-government and charity. Instead, children are only to reach their ultimate state of nirvana if the State becomes the family itself. After all, much like those other pesky private institutions — churches, schools, businesses…that kind of thing — the private family simply cannot be trusted (fascism alert).
To illuminate the errors within such a view, I lean on economist Milton Friedman, whose widely circulated exchange on the distribution of income vs. wealth provides some good insights.
Here’s Friedman in his own words:
The thing that is amazing that people don’t really recognize is the extent to which the market system has in fact encouraged people and enabled people to work hard and sacrifice — in what I must confess I often regard as an irrational way — for the benefit of their children. One of the most curious things to me in observation is that almost all people value the utility their children will get from consumption higher than their own.
As for where I stand, I take a view quite similar to that I made in my recent post on WALL-E vs. the Jetsons:
When the material needs are met by utilizing the proper socio-political framework, we can then more easily progress as a society toward a proper spiritual orientation. If we take a different path, and attempt to Read the rest of this entry »
In my most recent post at Common Sense Concept, I take a look at Bill Easterly’s recent interview with economist Deirdre McCloskey, author of the new book, Bourgeois Dignity: Why Economics Can’t Explain the Modern World.
McCloskey seeks to topple our conventional views of what leads to economic growth, arguing that much of it comes down to maintaining proper attitudes about liberty and dignity.
Her thesis, as explained in the interview, is as follows:
Modern economic growth — that stunning increase from $3 a day in 1800 worldwide to now upwards of $130 a day in the richest countries, and anyway $30 as a worldwide average — can’t be accounted for in the usual and materialist ways. It wasn’t trade, investment, exploitation, imperialism, education, legal changes, genes, science. It was innovation, such as cheap steel and the modern university, supported by an entirely new attitude towards the middle class, emerging from Holland around 1600. (It has parallels in classical music and mathematics and politics, in all of which the Europeans burst out, 1600-1800.)
As usual, I turn McCloskey’s theory toward Christianity, and more specifically, evangelicalism, examining how evangelicals tend to view such elements (nowadays) and whether those views are attributable to some recent sociological trend or the belief system itself.
To use the evangelical sphere as an example, there seems to be an increasingly common sociological disdain for innovation and markets, which seems to imply that the “tenets” of evangelicalism conflict with Read the rest of this entry »