Samuel Gregg: On Economic Misconceptions

Quote

One of them is the notion that wealth is a fixed amount. This is called the “zero-sum game” fallacy. It implies that one person can only become wealthy by other people becoming poor. Entrepreneurship and the right institutions in place (especially the rule of law) are the factors that nullify that myth.
Another misconception is how the economic value of something is determined. It’s not through the labor that creates an object or service. Rather, it’s through the subjective value that is attached to the good or service by hundreds of thousands of people in a market place. The price of a book I write is not determined by how many hours I spent working on it, but by what people are willing to pay for it. And what they are willing to pay for it is determined by how much they want it compared to all the other books, services and goods they want.

Then there is the notion that free trade can only benefit the wealthy or wealthy countries. Again, if you look at the stories of how nations escape poverty, it’s not through subsidies, protectionism and closed markets. Rather, it’s through entering what St. John Paul the Great called the circles of exchange and embracing institutions such as rule of law.

The whole question regarding economic misconceptions is a fascinating one — so much so that we even have a course at Acton’s summer university program on that topic. We address and correct common economic fallacies, and this is something that many people — Catholic, Eastern Orthodox, evangelical and Jewish — find extremely helpful.

Read more: Cultivating Capitalism’s Compatibility With Catholicism.

VN:F [1.9.22_1171]
Rating: 10.0/10 (1 vote cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Moral Witness Requires Clear Thinking on Environmental Science

Here’s the central point of my most recent essay for the Acton Institute:

Yes theology and science “have different points of departure and different goals, tasks and methodologies” but they “can come in touch and overlap.” For this convergence to be fruitful we must resist “the temptation to view science as a realm completely independent of moral principles.” Science can, and often does, serve as “a natural instrument for building life on earth” (Basis of the Social Concept of the Russian Orthodox Church). However when we limit ourselves merely to the findings of the natural, social and human sciences, we risk confusing expediency with prudence and diluting the Church’s witness.

You can read the whole essay here: Pebble Mine: Moral Witness Requires Clear Thinking on Environmental Science.

VN:F [1.9.22_1171]
Rating: 10.0/10 (1 vote cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

To Lift Up the Poor, Must We Soak the Rich?

Quote

Ross Douthat,

Before we talk about significantly expanding our investments in education, elementary and collegiate, how confident should we feel that our existing “investment” in the “future productivity” of the poorest Americans is reaping value-for-the-dollar rewards?

You can read the whole thing here: “To Lift Up the Poor, Must We Soak the Rich?”

h/t: Acton PowerBlog.

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Re-Distribution of Wealth of Wage Theft?

An interesting editorial by Corey Robin in the New York Time (The Republican War on Workers’ Rights) that highlights I think the underlying moral problem of using wealth redistribution to level out income inequality.

Stay with me a moment.

The Robin reports that in

…most states, tipped workers earn an hourly wage that is less than the federal minimum — the federal subminimum wage for tipped workers is $2.13 per hour — because they’re supposed to make up the rest in tips. (They often don’t; the poverty rate among waiters and waitresses is 250 percent higher than it is among the general work force.) But non-serving staff who don’t get tips must be paid the minimum wage.

But then the editorial takes an interesting turn.

Republican state legislators have devised a way around that. In 2011, lawmakers in Wyoming introduced a bill that would have allowed restaurants and other employers to force their serving staff to pool their tips; tips would be redistributed among the nonserving staff, who could then be paid the subminimum wage. That same year, Maine legislators passed a bill declaring that “service charges” were not tips at all. Because they aren’t tips, they don’t belong to the serving staff. Employers can pocket them — without informing customers — whether they redistribute them among the staff or keep them.

There are two different issues here. The second of these, Maine legislators “declaring ‘services charges'” are not tips and so “don’t belong to the serving staff” is problem one that will cost all the serving staff money. If so then the employer has (potentially at least) unjustly withheld wages from the wait staff.

The first issue–allowing “restaurants and other employers to force their serving staff to pool their tips; tips would be redistributed among the nonserving staff, who could then be paid the subminimum wage”–raises an interesting policy question. If, as Robin asserts, this is “wage theft” what do we call collecting taxes with the explicit aim of income redistribution?

Why, in other words is it “theft” when employers redistribute wages among employees but it is an expression of “social justice” when the government does? A key moral difference is that in the latter case the redistribution is coercive through the government’s authority to tax. In the former, however, the relationship between employer and employee is voluntary (at least in the formal sense, I understand that in particular cases, the employee may not have any other options but to work for a given employer).

It would seem to me that all things being equal the employer’s actions are at least morally defensible. But if they aren’t, if they are immoral (“theft”) then so too are any and all government programs that seek to less income inequality through a policy of mandated wealth redistribution.

In Christ,

+Fr Gregory

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Doing Justice for the Low Wage Worker

One of the many things I came to appreciate serving Greek Orthodox parishes is how much work is involved in operating a family run restaurant. Owners and their families often put in long hours doing hard manual labor for small profits and with little financial security. A similar state of affairs holds true for the other small business owners I’ve known both in my family and in the different parishes I’ve served.

It’s important to keep this all in mind when looking at not simply small businesses or “mom & pop” eateries but also at those larger corporations that typically pay low wages. Because Marxism has become a part of the cultural waters in which we swim, it easy to assume that low wages are inherently and objectively unjust. The argument here goes something like this: In paying low wages, the employer is exploiting his employees by not giving them the “true” value of their labor. It is the worker, not the owner, who is the source of the profits generated by the business.  Put another way, the worker gets nothing besides his wage and that wage falls far below the value he gives to the employer. But is this really true? Continue reading

VN:F [1.9.22_1171]
Rating: 9.0/10 (1 vote cast)
VN:F [1.9.22_1171]
Rating: +1 (from 1 vote)

Corporate Culture, Corporate Conscience

The removal of “Brendan Eich, Mozilla co-founder and creator of the JavaScript programming language” should make us all very concerned. He was not pressured to leave for what he did but what he believes. Here’s the central point that Joseph Sunde makes in his post at the Mozilla’s Statement of Faith and the Altars of Conformity:

…amidst all the pooh-poohing of the baker, the florist, and the photographer — whose complaints actually are bound up in the activities at hand – those very same critics casually proceed to make people the central thing. As the statement of faith clearly concludes, it is Eich who is the aggressor, and Eich who must be removed. The peace and tranquility of the interwebs is at stake, and influential proponents of archaic institutions mustn’t be allowed to stand in its way.

This isn’t to reject out of hand the right–even the obligation–of corporation to shape their business around specific moral norms.

Business are culture-makers at the core, and thus, conscience ought to guide such activities, from the bottom to the top and back again.

At the same time, however

…one can’t help but suspect this is less about a distinct corporate conscience than it is about blind cultural conformity. But then one remembers that, in this case, conformity the conscience, and there’s not a whole lot more going on “up there” than a raw fear of that looming Idol of Egalitarianism.

The central “virtue” of conformity is loyalty, to follow orders and to think along with the group. Nothing, it seems to me, can be further from what is necessary for a dynamic and growing business. Much less is it compatible with a free people and the value of the person.

In Christ,

+Fr Gregory

 

Enhanced by Zemanta
VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

The Battle for Purity

Paul S. Loverde, the bishop of the Catholic Diocese of Arlington, Virginia, has an interesting essay on the First Things site (Let the Battle for Purity Begin). Based in part on the new edition of his pastoral letter on pornography, “Bought with a Price” (available at Amazon for Kindle and at www.arlingtondiocese.org/purity), Bishop Loverde writes that

The pornography epidemic is something to which all people of good will must devote more attention and talk about more openly, but first we need to understand something of the scope and character of the problem.

He goes on to say that

Those who deny that the act of viewing pornography has any negative consequences must understand just how toxic the situation has become. It may be that a man now in his forties, say, remembers being a curious adolescent, stealing glances at a magazine in a neighbor’s home or in the aisle of a convenience store. As morally problematic and harmful as that act surely is, such behavior was arguably slow to become habitual and the physiological and psychological consequences were infrequently severe. That experience is far removed from what young people face today.

He goes on the discuss briefly some of the scientific research about the effects of pornography as well as the moral and spiritual consequences that he’s seen in his own pastoral ministry. Continue reading

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)