A collection of short essays by Acton writers, click a link to jump to that article:
If you care about human flourishing, promote growth
Samuel Gregg, Acton Commentary
Economic data flood our screens these days. But there’s one number upon which everyone should focus: The rate of economic growth in the Gross Domestic Product (GDP). It shows an increase in an economy’s ability to produce goods and services.
How is America doing? Not well. In the first quarter of 2017, the U.S. growthrate was a mere 0.7 percent. That’s the lowest since 2014. In fact, between 2010 and 2016, the economy grew at an annual average of only 2.1 percent. That’s more than one percentage point lower than the average rate of 3.21 percent since 1947.
Now retail jobs are often part-time at lower wages. But they’re still important. Many people need part-time employment. Think of students who want to help pay for their studies. A part-time job often allows one parent in a family to look after the children while also contributing to the family’s overall income.
All this is usually put at risk in low-growth or negative- growth economies. The rich can look after themselves. The poor, however, cannot. They don’t have the assets to weather the storm.
Economic growth isn’t the solution to all of humanity’s problems. As no less than Adam Smith understood, it’s a means to an end—not an end in itself. It can even fuel the perennial temptations associated with materialism. But that’s no excuse for trivializing growth. It is hugely important to societies that want to reduce poverty—and achieve less material goals, such as increasing education. It’s harder for people to pursue goods such as education or fulfill their family responsibilities in an anemic or stagnant economy.
Put another way: if America wants to be great in the fullest sense of that word again, more lasting and higher economic growth isn’t an optional extra. It’s a necessity.
Will free trade help the environment after Brexit?
Philip Booth, R&L Transatlantic Blog
Many people believe Brexit will be bad for the environment. The EU has major responsibilities in this policy area, and it is feared that, after Brexit, policy priorities will be realigned.
As it happens, the EU’s record when it comes to environmental matters is not good. It is often suggested that the Common Agricultural Policy, an important protectionist measure that supports EU farmers, encourages farming practices that damage the environment, though its explicit objectives are designed to promote sustainability. And although there have been improvements in recent years, the first 20 years of the EU’s Common Fisheries Policy was a disaster for fish stocks. An indication of the degree of waste is given by the fact that in 2011, in some EU fisheries, as much as 70 percent of caught fish were discarded because of the perverse incentives of the quota system. More market-based systems of fish conservation, such as that used in Iceland, produce much better environmental outcomes. The EU also has not been notably successful at reducing carbon emissions and goes about the job in a way that imposes much higher costs on the economy than is necessary. In addition, the EU’s insistence on banning genetically modified crops—an issue on which it is now intending to give a little more sovereignty to member countries—does it no credit at all.
Indeed, we should not expect the EU to be effective in promoting the environment. One reason for that is that very few environmental problems are EU-wide challenges. There are global environmental problems (such as climate change) and there are local and national problems.
Certainly, the surest way to encourage people to be good stewards of creation is to have a free economy combined with good institutional mechanisms for ensuring that people take responsibility for the environmental resources they consume. Free trade and private property are the linchpins of such a system.
Anti-Americanism at the Vatican
Kishore Jayabalan, Acton Rome
It’s been a couple weeks since La Civiltà Cattolica published “Evangelical Fundamentalism and Catholic Integralism: A Surprising Ecumenism,” basically attacking American religious conservatives for practicing an “ecumenism of hate.” It drew immediate criticism from many on the Right and the praise of those on the Left.
The article is so shoddy in tone and substance that it really should not be taken seriously. It’s as if it were written just to add fuel to an already raging partisan fire in the Catholic Church in the United States of America. The only reasons it has drawn so much attention are that its authors are known to be close friends of Pope Francis and that La Civiltà Cattolica is essentially vetted by, and therefore unofficially representative of the views of, the Vatican’s Secretariat of State.
Politics is not simply a matter of holding to certain principles but also of adapting to changing realities and allegiances. If everyone held the same beliefs about God and politics, we wouldn’t have much to live or die for, and the world would be a much less interesting place.
Ultimately, denying religious and political differences is a cowardly retreat from the world, born of a desire to avoid messy and sometimes violent conflicts, of which Europe has seen its share. America is both a result of and a reaction to this European way of thinking. On the one hand, many Americans are proud of their European heritage and continue to come here for educational and cultural reasons; on the other, they left their old countries in search of a better life with more opportunities for advancement and growth. Americans are, therefore, much more willing to express their differences openly and work together in spite of them. This often strikes Europeans as uncivilized if not dangerous to the common good, but it accounts for much of the misunderstanding I’ve witnessed both personally and professionally.
The misunderstanding applies to everything from religion and politics to crime and punishment and economics. Americans embrace pluralism while Europeans first ignore, then placate, before becoming alarmed and finally destroy each other over their differences. At least they eat, drink, dress well and leave behind some very impressive works of art.
Vive la différence!
Our economic age of anxiety
Victor V. Claar and Greg Forster, Journal of Markets and Morality
We are all Keynesians now, in a chilling sense. Through the cultural effects of the Keynesian Revolution, we have been taught to think of ourselves fundamentally as consumers, as bundles of desires striving to be satisfied rather than as producers of good things that improve the world and serve humanity. We have been taught to think only of what satisfies present desires, not to build up good things over time so our grandchildren inherit a better world. “In the long run we are all dead,” Keynes said, banishing from our horizons any concern for what kind of world we leave our descendants when we go. And we have been taught to think of ourselves as cogs in a vast machine, under the control of managerial experts. To accommodate the experts’ demands we must all be ready to reorder our lives down to their very roots—since taking control of the economy necessarily involves exercising ever-greater control of all areas of human life.
There is a sense in which even the anti-Keynesians are all Keynesians now. The major schools of economic thought that have emerged to challenge Keynesianism—the Chicago and Austrian schools—developed within the amoral discourse incubated in the neoclassical period and consolidated by Keynes. They share, in a somewhat mitigated but essentially similar form, Keynesianism’s privileging of consumptive preferences over productive purposes, and its reductive inability to think cross-generationally. And while they strive to resist the Keynesian tendency to justify the encroaching powers of managerial technocracy, their acceptance of Keynesianism’s materialistic anthropology and morally shallow categories for thinking about economic activity leaves them unable to offer the effective resistance to creeping totalitarianism that is one of their primary goals.
In the long run, however, it is the Keynesian Revolution that is dead. Awareness of the limitations of dominant economic categories is growing. The only remedy for our moral anxiety about economics is a thorough repudiation of the influence of the materialistic model of homo economicus on our thinking and practice. That influence has been complex and extensive; uprooting it will be the work of a generation. We believe that it is the work of this generation, and a failure to undertake it will leave our nations unequipped to face the unfolding political, economic and social crises of our times.
This essay was excerpted and adapted from Acton Institute’s Journal of Markets and Morality (Vol. 20, No. 1).
Victor V. Claar is associate professor of economics at Florida Gulf Coast University in Fort Myers.
Greg Forster serves as the director of the Oikonomia Network at the Center for Transformational Churches.
Making college expensive by making it free
Anne Rathbone Bradley, Acton Commentary
The state of New York recently passed legislation initiated and pushed by Governor Andrew Cuomo to make college “free.” The Excelsior Scholarship, as the program is known, attempts to provide free tuition to New York public universities for families making $125,000 or less.
In the long run, this policy will make college much more expensive. The legislation doesn’t free up scarce resources; it rearranges existing resources and is funded through taxes. It discourages innovation and cost-saving measures by colleges.
Many are predicting that the Excelsior Scholarship will help traditional college students, but not the neediest. Those students at the lowest end of the income distribution already have access to grants and loans, so this funding will not be offered to them first.
People will enter college who may be better off pursuing some other form of education. These students will have a more difficult time finishing college and many may drop out. College dropout rates are an increasing problem, with about one-third of students dropping out, and the Excelsior Scholarship will likely exacerbate this problem.
We can all agree that an educated population has vast societal benefit. Higher education is important in the increasingly digital and global age and necessary for us to live into our God-given skills and talents. We need to encourage competition so that each of us can receive the education we need—one that suits who we are and does so at ever-lower prices.
Civil asset forfeiture: What you should know
Joe Carter, Acton PowerBlog
Civil asset forfeiture (hereafter CAF) is a controversial legal tool that allows law enforcement officials to seize property they claim has been involved in specific criminal activity.
Typically, civil law involves disputes between private citizens, while criminal law involves disputes between private citizens and the state (i.e., the “people” represent the interest of victims). CAF is a hybrid of the two, a dispute between the state and a private citizen’s property. Because CAF proceedings charge the property itself with involvement in a crime, the property owner must prove the property was not involved in criminal activity. Such property can include land, vehicles, cash, personal possessions, etc.
According to the Department of Justice, the Justice Asset Forfeiture Program is an initiative that “removes the tools of crime from criminal organizations, deprives wrongdoers of the proceeds of their crimes, recovers property that may be used to compensate victims, and deters crime.”
At the federal level, forfeiture can be administrative, judicial, criminal and civil.
Administrative forfeiture is the process by which federal seizing agencies may declare property forfeited to the U.S. government without judicial involvement. Seizures must be based on probable cause.
Judicial forfeiture, both civil and criminal, is the process by which property is declared forfeited to the United States by a court.
Criminal forfeiture is an action brought as part of the criminal prosecution of a defendant that includes the forfeiture of property used or derived from the crime. If the defendant is convicted, the judge or the jury may find that the property is forfeitable.
Civil forfeiture is a proceeding brought against the property rather than against the person who committed the offense. Civil forfeiture does not require either criminal charges against the owner of the property or a criminal conviction.
In federal law, the burden of proof is placed on the owners of the property to prove they had nothing to do with the alleged crime. As the Institute for Justice explains,
In essence, most civil forfeiture laws presume that people are connected to any criminal activity involving their property and force them to prove otherwise to recover it. This is precisely the opposite of what happens in criminal trials, where the accused is presumed innocent until proven guilty by the government. It also often involves a practical impossibility, as it requires people to prove a negative— that they did not know about or consent to the illegal use of their property.
A person must prove they are innocent of the crime to get back their seized property.
If a claimant is successful in proving their innocence in a civil forfeiture case, Congress has mandated they are entitled to have the government pay all attorneys fees and other litigation expenses.
In the fiscal year 2016, a total of $1,921,273,552 was collected in the sale of seized property by the federal government.
Joe Carter is a senior editor at the Acton Institute.
The cooperative magic of work
Dylan Pahman, Foundations of a Free & Virtuous Society
“Work,” writes the Reformed theologian Lester DeKoster, “is the form in which we make ourselves useful to others.” I like this definition because it puts things in a realistic, everyday perspective. Certainly, people can work just because they want a paycheck to spend on themselves alone. That might be greedy, but we need to be careful not to confuse profit with greed.
People work in order to profit, but profit is not good or evil in itself. That judgment depends on the circumstances in which it was gained and the use to which it is put. And as DeKoster points out, our work itself is service to others. If it wasn’t, they wouldn’t pay us to do it in the first place, and most people wouldn’t want to do it for free. It’s an exchange.
The division of labor is the phenomenon that the more the manufacturing of individual components of an eventual, finished product can be broken down into separate jobs, the more efficiently it can be produced.
When people work together (literally), they are able to multiply the fruits of their labors far beyond what they could each do alone. God made us to flourish in communion with one another. Ten people working alone might be able to produce 10 pins total in a single day, maybe up to 200 (20 each) if they were really good, but nowhere near 48,000.
Nearly every product, every fruit of the cultivation of creation, connects us with nearly every other human being on the planet. And their collective contributions make this book more affordable while also benefiting more people in the process. (Thanks, guys!) In this way, our work connects us with other people, serves their needs through products and property, provides for us and fulfills one of the purposes for which God made us.
This brief was excerpted and adapted from Dylan Pahman’s Foundations of a Free & Virtuous Society (Acton Institute 2017).
Dylan Pahman is a research fellow at the Acton Institute, where he serves as managing editor of the Journal of Markets & Morality.
The greatest crony capitalist deal in Wisconsin history
Joe Carter, Acton PowerBlog
President Trump, Speaker Ryan and Gov. Scott Walker recently announced Foxconn Technology Group would be building a display panel plant in Wisconsin. Gov. Walker called it “the single largest economic development project in the history of Wisconsin.” It will also be the biggest crony deal in Wisconsin history.
The government-granted privileges offered to Foxconn are a mix of different types reportedly worth $3 billion. Even if in the long run the deal turns out to be profitable for Wisconsin, it’s still a moral loss for the state. The power of the government should not be used to determine winners and losers in business.
The free market should also be a level playing field, but because of cronyism, Big Business is able to gain an advantage over smaller firms. Not only will small and medium-size businesses in Wisconsin not be getting the same types of breaks, they’ll be expected to fund the privileges given to Foxconn.
Does a company with revenues of $135 billion really need to be subsidized by Wisconsin taxpayers? Of course not. In the crony game, it’s not about what the company needs, it’s about what politicians need. Trump needs to claim he brought jobs back to the US of A. Ryan needs to show he can use the federal connections to bring the goodies back to his home state. And Walker needs to be able to say he “created jobs.”
So what if the taxpayers get stuck with the bill? That’s a price the crony politicians are willing to pay.
Joe Carter is a senior editor at the Acton Institute.
When good ideas cross the Atlantic
Alex Chediak, R&L Transatlantic Blog
Apprenticeships train young people in the skills needed to fill high-paying jobs, not only in manufacturing and construction but also in “white-collar” fields. Apprentices earn while they learn, meaning they experience the dignity of work and a paycheck from day one.
Apprenticeships have a long history of success in Germany. By age 20, about 60 percent of young adults have earned some kind of professional credential. Not only have they done so without paying for college, but they have earned income as apprentices. One of the key differences between the U.S. and German systems is that German students are required to choose a career track while in high school. Perhaps the United States has something to learn from this European policy.
The winds of change may be blowing in American education. For one, the U.S. manufacturing sector is on the rebound. Labor costs per unit of output in the United States are now only a bit higher than China and lower than industrialized nations, such as Germany.
Second, while unemployment is at a 10-year nadir of 4.3 percent, some six million jobs remain unfilled. While the 2009–17 trend promotes higher salaries for wage earners, the lack of additional skilled labor is hurting overall employer and nationwide productivity.
Tragically, while six million jobs remain unfilled, some seven million American men between the ages of 25 and 54 are neither working nor looking for work. Another two million men in this age range are looking for work but unable to secure a position. Apprenticeships have the potential to connect the long-term unemployed with high-paying jobs.
What do we know about these seven million men who are not even looking for work? We know they are disproportionally poor, uneducated (some haven’t graduated high school) and unmarried.
These unemployed men are not doing extra household chores or caring for ailing relatives. They are spending more time watching TV. They are increasingly signing up for government disability programs—sometimes as a form of unemployment, but also because idleness itself has caused young people’s health to deteriorate. In Men without Work, Nicholas Eberstadt shows that “57 percent of men twenty-five to fifty-four years of age who are out of the labor force reported [receiving] benefits from at least one government disability program in 2013.” Sadly, these men have significantly higher rates of depression, drug use (particularly opioid addiction) and suicide. They have largely given up on the possibility of gainful employment.
Apprenticeships have the potential to give these underutilized men the skills they need to enter productive society.
There is another factor that should steer the U.S. toward expanding apprenticeships. About 40 to 45 percent of those who begin a four-year college program will not graduate within six years. About 70 percent of college students rely on federal and private loans. The average debt load among the class of 2016 was about $37,000—a figure that has risen steadily in the last two decades, even as starting salaries (until recently) have barely budged. Default rates on student loans are higher among college dropouts—even though their debt loads tend to be much lower.
Let’s be clear: traditional college is not the right path for every high school graduate. And we can do more in high school to expose young men and women to lines of work that can be accessed with apprenticeships, trade schools and associate’s degrees—particularly in the healthcare sector and STEM-related disciplines.
The biggest trick now, it seems, is getting more employers to increase their investment in apprenticeships. In Germany, employers underwrite two-thirds of the total training costs. That exceeds the amount that U.S. firms spend on the less than 5 percent of apprentices.
Now is the best time for apprenticeships to migrate successfully from Europe to the United States.
Alex Chediak is the author of Beating the College Debt Trap (Zondervan 2016) and a frequent writer on issues that young adults face.