Posts Tagged Soviet

Beyond the Noble Savage, Beyond Economic Man

Economic ManThe 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 »

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You Can’t Plan a Market: Transforming Culture from the Bottom-Up

The White Man's Burden by William EasterlyWhy has post-Soviet Russia not panned out to be the bustling, prosperous economy that the freedom folks predicted it would be? Is this the fault of the free market, or is there something deeper at work?

This week at AEI’s Values and Capitalism, I examine the question, channeling economist William Easterly to make the case that “you can’t plan a market.”

Although many Western tinkerers wrongly ignore the structural limitations in improving developing economies, many on the opposite side make the mistake of pretending that the structural stuff is a cinch.

I argue that it isn’t:

In our modern, polished system (with the wear-and-tear steadily increasing), we are tempted to look at other countries and think their problems are simple enough to be fixed by scribbling a couple solutions on paper and circulating it through the right hands. Even for free-market types, there is a rash assumption that all it takes is a magical structural concoction and a semi-functional government to get a poor country in motion.

Forget the individual habits and beliefs of the people on the ground. Forget the spiritual and cultural factors that limit or propel that society forward. Forget the psychological damage caused by previous (or current) totalitarian rule. “Just give them a market,” we say, “and let them be.”

As I say in the piece, “spontaneous order is not spontaneous order unless it is spontaneous.” Even in America, lest we forget, our thriving economic system did not come from the wave of a magical capitalism wand. Look no further than the 19th century to behold the painful and chaotic emergence of what we know today (and appreciate it).

To demonstrate this lesson, Easterly’s book points to several key market components that are difficult to “invent,” particularly from the top down: trust, property rights, social relationships/unity, peace, etc.

Such features — what Nick Schulz and Arnold Kling call “intangible assets” — must originate from Read the rest of this entry »

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Prosperity Explosion: Is Income Disparity Necessary for Growth?

Hans Rosling recently released a marvelous video on the relationship between income and life expectancy over the last 200 years (HT). The visualization is stunning.

See it for yourself:

One item worthy of note is how Rosling describes our “remarkable progress” as occurring despite “enormous disparities.” It is a small but important distinction to dissect.

Is it not true that loosening up trade and expanding freedom requires income disparity, or the mere allowance of it? After all, it is during the de-centralization and the individual freedom of the Industrial Revolution that the bottom-left countries started moving decidedly toward the upper right. In a free society, income disparity is typically a sign of efficiency, i.e., maximizing, channeling, and organizing human potential and innovation effectively (thus a subsequent boost to life expectancy).

This isn’t to say that the current extent of income disparity is inevitable, or that all forms of such disparity are signs of efficiency, but overall, you cannot have steady growth without a steady improvement of allocation, and you cannot maximize allocation improvement without allowing for inequality in economic rewards.

Don’t get me wrong. I share Rosling’s optimistic outlook about the future. I do think we can close the gap between “the West and the rest.” It is indeed possible and desirable that we get most people to the healthy-wealthy corner of Rosling’s chart.

Hans Rosling, data, visualizationHowever, I don’t think we can accomplish this if we see economic inequality as an evil or a hindrance to our productivity. It is in the countries that view it as such that we consistently find resistance to upper-right movement.

It is not, as Rosling says, despite income disparity that prosperity has exploded; it is in part because freedom-loving people stopped fearing it. We began living lives of individual invention and personal risk rather than cowering beneath crippling insulation and slavish submission.

It is only by allowing for life to happen that we can hope for life to improve.

(Photo Credit)

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My Intellectual Journey: Legos, Puzzles, and Communism

Common Sense ConceptI will now be writing a weekly post at Common Sense Concept, which is a brand new site backed by the American Enterprise Institute. The site is part of AEI’s Project on American Values and Capitalism, which was the sponsor of the recent event I participated in on envy and economics.

CSC will focus on the promotion of morality and values in our policymaking, particularly as they relate to free enterprise.

The first major event will be a debate between Sojourners CEO Jim Wallis and AEI President Arthur Brooks at Wheaton College. The debate will center on the question, “Does Capitalism Have a Soul?” I myself am hoping to make it out to the event, and if you’re anywhere near the Wheaton/Chicago area, I encourage you to do so as well.

I will be writing on the site’s Two Cents Blog on Faith and Free Enterprise along with some extremely bright evangelical thinkers. I look forward to participating in the conversation and am excited to watch this effort continue to evolve.

My first post is already up on the blog, and it provides a glimpse into my intellectual journey from childhood to adulthood. I talk about LEGOs, puzzles, and most importantly, how horrifying communism sounded as a six-year-old.

Here’s an excerpt from the post:

Being the ignorant little kid I was, I asked my Mom if the U.S.S.R. was the biggest country in the world. She walked over to the puzzle, glanced at the back of the box, and informed me that as of a few months ago, the U.S.S.R. no longer existed.

For a six-year-old, that’s a bit hard to swallow. How can a country just Read the rest of this entry »

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Money, Greed and God: Is Capitalism Evil?

Jay Richards is the author of a book called Money, Greed and God: Why Capitalism Is the Solution and Not the Problem, in which he argues that capitalism is completely consistent with Jesus’ teachings and the Christian tradition as a whole.

I haven’t read the book yet, but am a frequent reader of Richards’ writings on the Enterprise Blog.

I came across this video over the weekend, and although it’s a bit long, I encourage you to take the time to watch it.

What I found most striking was Richards’ discussion of self-interest vs. selfishness, which is a topic I have often discussed on this blog (particularly in my review of Ron Chernow’s Titan).

Richards notes that self-interest must be properly ordered, and when it is, we will realize that our families, our neighbors, and our communities are all in our self-interest. Selfishness, on the other hand, is “disordered” self-interest. For example, I may choose to commit adultery, and although such an act would be an act of selfishness, I would clearly not be acting in my holistic, long-term self-interest. I would end up feeling Read the rest of this entry »

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Jónsi’s Go: Which Soviet Commissar Would’ve Thought This Would Be Profitable?

Yesterday I picked up Jónsi’s new solo album Go and have been thoroughly enjoying it. For those who are unfamiliar with Jónsi, he is the frontman for the now-popular Icelandic band Sigur Rós.

When it comes to music so creative and out-of-the-ordinary, I can’t help but credit the free market and its contributions to prosperity. Centuries ago, artists like Jónsi would have been slaving away for some lord or king and wouldn’t have had the time or the resources to dabble in music, especially something as “silly” as this.

Most of us appreciate the free market when it comes to products necessary for our survival (e.g. modern medicine, central heating, communication avenues, etc.). However, I think we tend to forget that products like Jónsi’s music have also been created thanks to free enterprise.

In today’s Western societies, individuals everywhere are able to Read the rest of this entry »

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