I try to keep this blog as free from politics as possible, which may be hard to believe given its title refers to the political spectrum, but nonetheless I do try. Again having said that, a motivation to set this up was friends of mine who are Conservative voters suggesting to me it was the "Christian" thing to do, much to my consternation.
I think the main reason I try and keep away from politics and government action is that I don't think that governments should be forcing people to do "Christian" things; so I don't think abortion should be outlawed, and I think all other government actions that discriminate unfairly against people made in God's image is wrong.
I believe Christians vote Conservative because they believe that small governments better enable people to get on in life; bigger governments stifle effort and creativity, crowding out small business and entrepreneurship. But this involves a healthy level of confidence in market mechanisms to deliver, and I believe too high a view of the goodness of man - particularly too high for Christians aware of how sinful man is.
Why do I say this when from Adam Smith onwards, economists have espoused the virtues of the market in mitigating man's own greed and enabling it to contribute towards the greater good? Because there are plenty of situations in which the price mechanism fails. It doesn't need government intervention for the price mechanism to stop doing its job of revealing relative scarcity and relative abundance, it just needs unscrupulous men and women.
I've mentioned in previous posts how a "nice equilibrium" where everyone does a good honest job and hence everyone trusts everyone to do a good honest job - the incentive is there for someone to deviate and do a bad job, and get out while they can (and even if they fail, their actions will succeed in destroying the good equilibrium since now people know with non-zero probability there are some bad people about).
All this by means of an introduction to what I was planning to write about - recent Tory announcements regarding the economy. In particular repeated comments on the 50% tax band, and also recent talk about abolishing all employment protection. The bottom line of these is a trust that despite bosses being unscrupulous, the end product is a much better, clean, shining functioning economy because of competition - the bad bosses, the nasty ones, will be weeded out and left on the scrapheap if they don't become nice shiny bosses.
If I sound a little sarcastic there, it's because I don't buy it. Those proposing it probably think it has basic economics on side, but it may do: Very classical economics that hasn't considered much recent economic study into areas such as industrial organisation, game theory and behavioural economics. There's no point in me repeating what Chris Dillow writes about much more elegantly, but if you want some demolitions, here are a couple.
Now the question is, as Christians, what should we be doing? James 1:27 says "Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world."
I seriously wonder how scrapping the 50% tax rate on those earning above £150k (polluted by the world?!), and stripping away all employment rights of workers (usually pretty low paid - widows and orphans in their disress?!), counts here. The hardest of hard Tories would say "Charity should do the hard work", yet this again ignores some basic economics: If there's a positive externality (net social benefits greater than net private ones) the market (charity) will underprovide it. As was evident before the Welfare state.
Of course, I'm proposing little positive in this post, just getting some things off my chest. The main one being this idea that a small government is what we need, and that it's somehow more Christian, if that were possible.
Showing posts with label social justice. Show all posts
Showing posts with label social justice. Show all posts
Friday, October 28, 2011
Monday, November 22, 2010
Social Justice and Libertarians
I'm helping a friend organise a seminar at a Christian "retreat" (for want of a better word) next weekend on Social Justice: God's heart for the poor. It's thought provoking.
It reminded me of how I usually look at Biblical passages: They seem to be the complaints of the poor and oppressed and although the oppressors are not necessarily made clear (other than often those that are oppressing David and others militarily), it has always struck me that it chimes with a lot of what the Left rails against profit maximising business.
The hope is that in this seminar we avoid a bit left vs right distinction, but I suspect it may well come up. I think those on the left are guilty of overdoing their aversion to the word profit - the motive to create money-making opportunities needn't always be bad, and often the alternative is worse - concentrate power in the hands of sinful politicians as opposed to corporation owners.
However, I think the right is equally guilty of a panacea-like view of markets: They are perfect, and should not be meddled with. For better or worse, I regularly look at the Cafe Hayek blog (which has the most irritating picture of a waiter - do all Libertarians look as annoying as that?!), which is generally a succession of letters written by Don Boudreaux to various US newspapers. This one in particular is consistent with the general feel: Bill Gates has no more power over my life than I do over his.
Libertarians, to make a sweeping statement, are unable to accept the proposition of market power in the absence of government intervention. They won't accept that in local areas companies are able to act as effective monopolies. They won't accept that companies are creative and manufacture ways to manipulate customers in the name of higher profits and returns; for them, the market activity of the company is entirely benign, because the market will always correct for nasty players (e.g. Microsoft) by nicer, more innovative players (e.g. Apple - for a naive take).
I find it hard to support either viewpoint and I guess that's why I'm pretty near the centre. Markets are far from perfect and basic economic theory talks about how the disparity between a socially optimal market outcome and a privately optimal one can be stark. But also, just the existence of that externality, in economics jargon, isn't necessarily enough to justify government failure on top of market failure. Railing against profits as the left do can be just as dangerous.
I think the Bible's passages on Social Justice make it clear: It's not ungodly to be rich - it's the mindset you have about it. If you place your entire being - hopes and all that - in your wealth as opposed to the Lord, then you'll be in trouble. But if you have put your trust in the Lord, as the book of James points out, this has to manifest itself in terms of actions - doing something about the poor and oppressed (and not just pontificating about whether they should or shouldn't exist - a trait of the right I think), who will always be with us in a fallen world.
It reminded me of how I usually look at Biblical passages: They seem to be the complaints of the poor and oppressed and although the oppressors are not necessarily made clear (other than often those that are oppressing David and others militarily), it has always struck me that it chimes with a lot of what the Left rails against profit maximising business.
The hope is that in this seminar we avoid a bit left vs right distinction, but I suspect it may well come up. I think those on the left are guilty of overdoing their aversion to the word profit - the motive to create money-making opportunities needn't always be bad, and often the alternative is worse - concentrate power in the hands of sinful politicians as opposed to corporation owners.
However, I think the right is equally guilty of a panacea-like view of markets: They are perfect, and should not be meddled with. For better or worse, I regularly look at the Cafe Hayek blog (which has the most irritating picture of a waiter - do all Libertarians look as annoying as that?!), which is generally a succession of letters written by Don Boudreaux to various US newspapers. This one in particular is consistent with the general feel: Bill Gates has no more power over my life than I do over his.
Libertarians, to make a sweeping statement, are unable to accept the proposition of market power in the absence of government intervention. They won't accept that in local areas companies are able to act as effective monopolies. They won't accept that companies are creative and manufacture ways to manipulate customers in the name of higher profits and returns; for them, the market activity of the company is entirely benign, because the market will always correct for nasty players (e.g. Microsoft) by nicer, more innovative players (e.g. Apple - for a naive take).
I find it hard to support either viewpoint and I guess that's why I'm pretty near the centre. Markets are far from perfect and basic economic theory talks about how the disparity between a socially optimal market outcome and a privately optimal one can be stark. But also, just the existence of that externality, in economics jargon, isn't necessarily enough to justify government failure on top of market failure. Railing against profits as the left do can be just as dangerous.
I think the Bible's passages on Social Justice make it clear: It's not ungodly to be rich - it's the mindset you have about it. If you place your entire being - hopes and all that - in your wealth as opposed to the Lord, then you'll be in trouble. But if you have put your trust in the Lord, as the book of James points out, this has to manifest itself in terms of actions - doing something about the poor and oppressed (and not just pontificating about whether they should or shouldn't exist - a trait of the right I think), who will always be with us in a fallen world.
Tuesday, October 19, 2010
More About This Blog
It's already been a few hours since my first post, and many things are still on my mind from discussions with various folk in recent weeks, on Facebook and elsewhere.
I should emphasise, if I haven't already, this blog is an attempt to collect my thoughts somewhere where they can be challenged or encouraged, and generally refined as they need to be.
It's not an attempt to raise economics above the Bible, or above other issues when people decide their political affiliation. It most certainly is not an attempt to paint one particular party as the Christian party; all parties are composed of fallen, sinful people and everyone knows that collective organisations of sinful people can make rather large pigs ears of things.
However, how broadly should economics be defined is an important question? A friend suggests social justice should come above economics in the grand scheme of things when we consider where our Christian vote or political affiliation goes. According to Wikipedia, "Social justice generally refers to the idea of creating an egalitarian society or institution that is based on the principles of equality and solidarity, that understands and values human rights, and that recognizes the dignity of every human being".
There's little doubt that social justice is a philosophical concept but also clearly it is an economics concept, and I suspect I'll be coming back to this again and again. Notably because in order to create a society that satisfies what Christians would decide to be the appropriate level of human right recognition and dignity, one has to have a deep understanding of the economic mechanisms at work that produce particular outcomes in society.
Often a free market can provide exactly this: Dignity and freedom for all participants. But economic theory is fairly clear that this happens when a market is competitive and all participants are price takers. Once we move away from this paradigm then we start to enter the realm where dignity is not afforded to all by the market and the question is what do we do then?
If we intervene we have to humbly recognise that government failure can be just as bad if not worse than the market failure that prompted it. We also have to give due consideration to the structures we will set in place; what incentives will they provide for market participants?
As I say, I'll come back to this plenty in the weeks and months to come I expect. But hopefully I've made it fairly clear that economics has to play a huge role in the matters important to a Bible-adhering Christian, and a good understanding of economics is very important when that Christian comes to think about politics and policies.
I should emphasise, if I haven't already, this blog is an attempt to collect my thoughts somewhere where they can be challenged or encouraged, and generally refined as they need to be.
It's not an attempt to raise economics above the Bible, or above other issues when people decide their political affiliation. It most certainly is not an attempt to paint one particular party as the Christian party; all parties are composed of fallen, sinful people and everyone knows that collective organisations of sinful people can make rather large pigs ears of things.
However, how broadly should economics be defined is an important question? A friend suggests social justice should come above economics in the grand scheme of things when we consider where our Christian vote or political affiliation goes. According to Wikipedia, "Social justice generally refers to the idea of creating an egalitarian society or institution that is based on the principles of equality and solidarity, that understands and values human rights, and that recognizes the dignity of every human being".
There's little doubt that social justice is a philosophical concept but also clearly it is an economics concept, and I suspect I'll be coming back to this again and again. Notably because in order to create a society that satisfies what Christians would decide to be the appropriate level of human right recognition and dignity, one has to have a deep understanding of the economic mechanisms at work that produce particular outcomes in society.
Often a free market can provide exactly this: Dignity and freedom for all participants. But economic theory is fairly clear that this happens when a market is competitive and all participants are price takers. Once we move away from this paradigm then we start to enter the realm where dignity is not afforded to all by the market and the question is what do we do then?
If we intervene we have to humbly recognise that government failure can be just as bad if not worse than the market failure that prompted it. We also have to give due consideration to the structures we will set in place; what incentives will they provide for market participants?
As I say, I'll come back to this plenty in the weeks and months to come I expect. But hopefully I've made it fairly clear that economics has to play a huge role in the matters important to a Bible-adhering Christian, and a good understanding of economics is very important when that Christian comes to think about politics and policies.
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