The Copper Club

Suburb

2009-04-23T13:29:00.004-04:00

1. It seems that this new system of efficienty could not last because it was built upon a community that was still somewhat tightknit, with its members holding similar beliefs and partaking in similar activities. However, as these things changed and the suburb grew and the importance of the individual and self-reliance increased, the lack of authority which characterized the leadership meant that it was inevitable that it would run into problems as difference of opinion with no singular means of enforcement became the order of the day.
2. Economically, the activities of the church-goers, in all of their various clubs and events, even in the building of the church itself, were probably efficient in that not only were they run most likely on volunteer work, the jobs were also being done by those with a vested interest in the matters at hand, meaning that they were probably working hard at what was being done, all the while establishing good relationships with their fellow church members.

Suburb

2009-04-22T22:26:00.002-04:00

The new leadership of Elmhurst replaced the old system of city rule by the 'elders" with a more efficient, more business-like city manager. Ehrenhalt suggests that the new efficiency worked fine in the short run, but fell apart in the long run. Why, do you think?
The fake community of the newly-created church nevertheless produced a lot of activity. Can you suggest some ways in which this is economically advantageous?

Ghetto

2009-04-21T14:34:00.001-04:00

1. Ehrenhalt says this because the hardships the citizens underwent living in Bronzeville caused them to bond with one another and form a community as a measure of self-defense. It was from within this community, with all of its institutions, that the hope and the encouragement to dream for the future were developed and fostered.
2. Bronzeville institutions fostered community in many ways. They brought together their citizens and gave them a voice of their own. From their own newspaper, the Defender, to their mayoralty, to their various and assorted clubs, Bronzeville was able not only to give a sense of unity to its citizens, but also a sense of belonging and optimism, in spite of the difficult conditions in which life had placed them.
3. Business fostered hope for Bronzeville’s members because it demonstrated to them the success of those within their community who had risen above their struggles and followed their dreams in spite of hardship. It showed them that entrepreneurship had rewards, in particular because of the support offered by their fellow citizens who were loyal customers, which also helped make the business owners into community leaders. With business such as policy, it also had the added positive side effect of being a kind of diversion from the hardship of everyday life. The hope created by Bronzeville business was different from hope created by a TV show about the rich and famous because it was connected to real, tangible lives, with which the citizens of Bronzeville could relate.

Adverse Prosperity

2009-04-20T18:35:00.004-04:00

1) The evidence he provided for his statement was the sense of posterity among its inhabitants. The attitude was that no matter how difficult things may be, the future was worth thinking about and planning for. Many inhabitants were farsighted, and they focused on events and ideas whose outlines were uncertain. In their hearts was the hope that through their hard work and determination they would break through the prejudices of segregated society.

2) Bronzeville institutions fostered community by building social institutions that were parallel to those of the white community. These institutions included a competition for the "mayor of Bronzeville," and even a full-fledged scouting program for black children. These and other institutions gave the people something to look forward to, a belief that there was a free society just beyond the horizon and hoped for its speedy arrival.

3) Business, legal and illegal, in Bronzeville was difficult, but those who prospered under the yoke were examples of "light shining in the darkness." They were rolemodels for many who sought to libe above the poverty line. Those who succeeded were regarded as moral heroes who won fairly against an unfair system. The ability to succeed amidst hardship provides hope that is different because people cannot relate to the rich and famous on a TV show, where the story is ficticious and romanticized for a captive (or envious) audience. In contrast, people who have a neighbor who owns and runs a successful business have a true and fascinating story. It is an example that is concrete and realistic; it can be grasped and followed as far as life allows them to. That is the difference between the hope created by real life as opposed to that fostered by a TV show.

Ghetto

2009-04-20T15:22:00.002-04:00

Ehrenhalt says that, arguably, Bronzeville community “flourished because of adversity.” What evidence does he give to support that view?
How did Bronzeville institutions foster community?
How did business (legal and illegal) foster hope? In what way is this hope different from the hope created, say, by a TV show about the rich and the famous?

Swift on Community 2

2009-04-16T12:30:00.002-04:00

(I don't know if I'm supposed to be blogging on this section or not......)
On pages 158-160, Swift talks about the difference between neutralist and perfectionist liberalism. He claims that the neutralist, unlike the perfectionist, will only allow for state intervention in areas where others are being harmed by individuals' free choices, but not because any kinds of actions are actually 'intrinsically evil.' He brings up the case of pornography, for example, saying that it could be banned by the state in the case of it harming women, but not due to the evils it inflicts on those who use it. However, this viewpoint seems problematic, because it does not give any support for how the harm arises if there is nothing inherently wrong with pornography. If it is freely entered into by both the women and those purchasing the materials, then how can one say that it harms women in any way without bringing in some kind of objective sexual morality, which would then apply to both sides? It seems that they are missing the connection between what is bad and what is harmful, perhaps trying to say that what is harmful is not inherently so, but simply so for that individual or group of individuals. However, it still seems that harmfulness must be connected to evil in some way, meaning that the lines will eventually be blurred between the state taking action on moral grounds and it taking action on the grounds of 'justice' for its citizens.

Swift on Communities

2009-04-14T15:06:00.000-04:00

1.From reading Tawney, Nisbet, and Ehrenhalt, the conservative-traditionalist-communitarians are concerned with the parameters which allow people to operate in a moral way. They understand the flawed nature of a person, and aim to constrain people to do what is good. They do this through the community/society. In contrast, to a liberal who prioritizes the individual choice.
2.“Liberals have no problem believing that people should be responsible for the outcomes that result from their own free choice.” We have a right to free choice, and as such a duty is imposed on us to allow others free choice. Every time a right is claimed, a duty is imposed. Liberals are born with minimal basic rights, and duties.
3.On these pages, it is demonstrated the similarities between a liberal and libertarian. The priority on free choice, and the freedom from relative/societal imposed values.
4.While a conservative-traditionalist-communitarians would emphasize the importance of a society/community and tradition, they would not necessarily encourage a relativist point of view. Nor would the necessarily believe that it is the role of the state to maintain said values. A liberal would say that the role of the state in this case is to make sure that the individual has a choice in what to believe and accept. An emphasis on the individual rather than the community.
5.A democratic society by nature is to represent the view of a majority, the existence of a majority requires a minority. Therefore, it is not possible that everyone will share every value.

Community

2009-04-14T13:39:00.000-04:00

1. Conservative-traditionalist-communitarians are concerned with authority, in the sense of societal ‘peer pressure’ arising from a kind of hierarchical community, which is founded upon tradition and custom and works for the good of the whole through the proper ordering of the individuals’ passions.
2. It seems to me that liberals are wrong in saying that men are born with rights from which follow certain duties. Rather, it seems to be that men naturally have certain duties or obligations, and they are given their rights in order to fulfill these. From this, it seems that there are certain duties we have which do not arise from our own choice but are ‘imposed’ upon us simply because we have been created with them.
3. Both of these pages talk about the importance to the liberal of leaving the realm of life choices and ethics up to the free individual. However, Friedman also seems to stress the fact that one cannot say for sure that there is an objectively better way of life (“of course, ‘bad’ and ‘good’ people may be the same people, depending on who is judging them”), while Swift says that even if there is an objectively ‘good’ life for people, it is vital that they are able to choose it for themselves.
4. Conservatives do seem to believe in the importance of social relations in the determination of values (although some values, they appear to believe, are objectively the same for all communities), and the need for society to enforce conformity to these; however, it seems a bit extreme to say that they want the state to be the one to fund those things founded upon their values, since they seem to believe in a kind of subsidiarity. Liberals on the other hand, would say that aside from a few basic things, such as freedom, justice and autonomy, which should be common to all, value is something determined by individual choice and not through societal relationships.
5. A democratic society would necessarily have to be somewhat non-unanimous in that there are going to be those (in the minority, but nonetheless present) who do not share the exact same values, and who would have to have the values of the majority ‘imposed’ on them in order to belong to the society. In this light, it seems that a certain lack of unanimity could be a part of a community, but this could only be backed up by authority, which seems to be a problem for liberals.

The Swift Community

2009-04-14T12:04:00.002-04:00

1) From reading Tawney, Nisbet, an Ehrenhalt, it would seem conservative-traditionalist-communitarians are concerned with restoring some vestige of familial belonging within society that has been lost with the advocacy of freedom and autonomy of individuals.

2) We do have just duties that are imposed on us and are not a result from our own free choice. One of these is to be ready to defend the nation of our birth; as we are all citizens of the Union, we are to a certain extent obligated to help defend each other against foreign invasion. War is always a threat to the well-being of our way of life and we have a responsibility to our neighbor's safety and way of life. Liberals are wrong to say that we are born with rights but acquire duties, because all rights have responsibilities that require us to be dutiful in their execution, or else liberty degrades to license.

3) Both Swift and Friedman advocate a kind of liberalism that emphasizes autonomy of the individual and freedom to live according to conscience. Both see individualism within the community as a positive benefit; as it cultivates a drive for excellence apart from the mainstream.

4) Conservative-traditional-communitarians would say something like that; there would be a demand for conformity in morals and customs. Liberals would disagree on the grounds that everyone has a right to live according to their conscience and enforcement of societal customs would be an invasion of privacy and a form of oppression.

5) No a community cannot be non-unanimous because community is about family, it is about familiarity and uniformity. A non-unanimous community would eventually fall into factionalism and dissolve into smaller communities with their own uniformity in customs and morals.

Swift on Community

2009-04-13T18:16:00.004-04:00

(From Swift, pp. 133-155. We'll read 155-175 for Thursday)

From your reading of Tawney, Nisbet, and Ehrenhalt, what are conservative-traditionalist-communitarians concerned with, if they are not so concerned with the “freedom and autonomy of individuals”?
“Liberals have no problem believing that people should be responsible for the outcomes that result from their own free choice.” Do we have any duties that do not result from our own free choice – just duties that are imposed on us? Are liberals right in saying that we are all born with rights, but then we acquire duties? Or are we born with duties?
Compare Swift, p. 147, with Friedman, p. 12.
From your reading of Tawney, Nisbet, and Ehrenhalt, would conservative-traditionalist-communitarians say something like, “our values are socially constituted, a fruit of our social relations. This is good. The state should protect them and enforce traditional teaching: it should fund parochial schools and Islamic madrasahs. Society should discourage heresy and enforce conformity”? What would liberals say?
Liberals promote democratic society as a “community of communities,” the ultimate community because it appeals to universal (unanimous) values. Can a community be non-unanimous, meaning that it enforces values that not everyone shares?

(To answer those questions, go back to your reading and consider this passage from Edmond Burke; emphasis added)

Government is not made in virtue of natural rights, [...]. By having a right to everything they want everything. Government is a contrivance of human wisdom to provide for human [lacks]. Men have a right that these [lacks] should be provided for by [government]. Among these [lacks] is to be reckoned the [lack], out of civil society, of a sufficient restraint upon their passions. Society requires not only that the passions of individuals should be subjected, but that even in the mass and body, as well as in the individuals, the inclinations of men should frequently be thwarted, their will controlled, and their passions brought into subjection.
This can only be done by a power out of themselves, and not, in the exercise of its function, subject to that will and to those passions which it is its office to bridle and subdue. In this sense the restraints on men, as well as their liberties, are to be reckoned among their rights. But as the liberties and the restrictions vary with times and circumstances and admit to infinite modifications, they cannot be settled upon any abstract rule; and nothing is so foolish as to discuss them upon that principle.

Social Responsibility of Business

2009-04-13T13:23:00.001-04:00

CEOs have responsibilities to the society in which they interact because they are members of said society before they are CEOs. Their responsibility is to truly maximize the value of the shareholders. That being the case, it would not be maximizing to create any negative externalities or direct produce any negative effects. Businesses only exist of the benefit of society, and as such are responsible for maximizing all the stakeholders interests too.

Labor Unions are not all the same, and not all good or bad. Labor Unions increase a dead weight loss for consumers, and tend to create monopolies. They make companies less efficient. Just treatment of workers is more important than efficiency, that said a Labor Union could be good. In practice, the effects are most probably more negative than positive. To an extent companies must seek efficiency and profits so as to maintain a labor force. As with all things a balance must be struck.

Avarice

2009-04-07T14:15:00.002-04:00

1) The main difference between modern economic thought and the medieval view is that the latter starts from the position that there is a moral authority to which economic considerations of expediency must be subordinated. In contrast, modern economic thought refers to economic expediency as justification for any particular action, policy, or system of organization.

2) The just price of a product is determined according to the amount necessary to ensure that the seller will have the necessities of life suitable for his station. This concept protects the consumer against extortion.

3) In practice, usury was wrong because it enabled profit to be made without labor; it was easy to lend money and make a profit, when the moral was to work hard and "earn" your wages. It hurt the borrower the most because the borrower still had to repay the usurer, whether he succeeded in making a profit with the loan or not, and if he could repay the usurer the borrower usually ended up in debtor's prison or became an indentured servant to pay the debt. Dante put usurers in the 7th Circle of Hell with the blasphemers and the sodomites because usury was considered a sin against nature, like sodomy, because it was to live without labor; and it sells time, which is blasphemous because time belongs to God alone, for the advantage of wicked men.

The Sin of Avarice

2009-04-07T14:14:00.002-04:00

1. Tawney believes that the difference between modern economic thought and the medieval view on such matters is that one (the medieval viewpoint) recognized an objective moral order/law within which matters of economics were to be judged and the other (the modern viewpoint) saw ‘economic expediency’ itself as the rule by which to judge these matters.
2. The ‘just price’ of a thing should not only be correlated with the factors involved in its production, but should also be such that all different classes of individuals are thereby enabled to obtain the things necessary for their sustainment. This concept is supposed to protect men against various forms of extortion by those who would overcharge for the products of their labor.
3. Usury was viewed as such an evil in practice because it is the ‘fixed and certain’ taking of money for which one has given nothing in return. Hence, it goes against the laws of justice, and also against the natural order of things whereby man is supposed to earn his living by his labor. But one of the biggest reasons for the condemnation of usury was its lack of accordance with Gospel values. As the law of charity and concern for neighbor is put aside in the order of loans, a danger enters in whereby not only can the borrower be exploited, but the usurious lender risks losing his soul, making him the worst one off in the whole situation. Hence, it seems that Dante put the usurers in this circle to show the intrinsically evil nature of usury and the consequences which it shares with other such forms of sinfulness.

The Sin of Avarice

2009-04-06T14:57:00.000-04:00

In Tawney’s view, what is the main difference between modern economic thought and the medieval view?
How do we determine the “just price” of a thing? What does this concept protect us against?
Why was usury so wrong, in practice? Whom did it hurt most? Why did Dante put usurers in the same circle (the 7th) of Hell as the blasphemers and the sodomites?

Jolly Ol' St. Nick's

2009-04-02T14:40:00.003-04:00

1) St. Nick's Parish seems warm. There is a sense of belonging that accompanies ordered living, especially when that order comes not from official regulations (like in today's gated communities) but from the unspoken "way of doing things", the unspoken way of life. Close-knit neighborhoods like those in St. Nick's Parish were able to provide many types of support structures for families when they needed it -- which is unlike the rampant "mind your own business" mentality that many of us grew up with.

2) Because efficiency and profit were not primary motives for all of the individuals involved, either consumer or producer. Loyalty, honesty, respect, and community were more important. That is not to say that they weren't motives -- it is just that they weren't primary motives. And, in the long run, it was worth more to Bertucci's and Ben Bohac to build loyal bases of customers -- it was better for business as well as better for their priorities.

3) Nepotism inspired in the workplace a sense of trust and duty that cannot be accomplished in the "every man for himself" workplace philosophy, or the "climb to the top by stabbing the backs of your peers" philosophy. Having family in the workplace made work a more organic part of everyday life: for the individual AND for the family. Work was a natural outpouring of other parts of one's life, instead of a segregated section that has little or nothing to do with the rest of living other than providing income. It was a family affair, and both the family and the employers were stronger for it.

4) A good athlete doesn't necessarily need a sadistic gym teacher -- there are many athletes who are internally motivated and need only guidance. However, there are some who would need the "firm hand" of a Fr. Lynch in order to excel; without it both they and the rest of the "team" would suffer.

5) In many ways, joining a convent was less restrictive than not joining. The opportunity to work "in the fields" of the best educational system around was one area where this is true. Also, life in general already contained many constraints -- the "unspoken ways of life" mentioned above in #1. With this in mind, religious life wasn't necessarily more restrictive, it was just restrictive differently.

Parish

2009-04-02T13:46:00.001-04:00

1. The neighborhood of St. Nick’s parish seems warm for the most part, due to the fact that it seemed to have an almost extended family kind of feel between all those who lived in the vicinity. On the other hand, living in such close quarters (even with one’s own family) can be trying; however, it’s actually what helps build the community aspect, as everyone is forced to learn how to at least tolerate one another.
2. People insisted on these kinds of actions because they were based off of personal relationships of trust, where there was more at stake than simply efficiency and profitability. Again, there was an almost familial aspect to it all that led to real concern for the ones involved on both sides of the transactions and which led to loyalty and eventually, a wider and more stable customer base.
3. Nepotism can be a good thing for employers and employees because it can build a strong and long-lasting base for the leadership of a company, meanwhile lending a kind of job security to the family, and it also acts as an incentive for proper behavior among the younger employees in the family, as their actions can have serious implications for their own advancement or those of their relatives.
4. It seems that there must necessarily be a kind of good-cop, bad-cop duo when it comes to authority, simply because gentle example can’t accomplish anything without stricter enforcement and vice versa. However, the stricter enforcement doesn’t necessarily have to be brutal or sadistic. Making someone push themselves for their own good, even if it causes a certain amount of sacrifice at the time (which can be painful), helps the person reach levels of achievement they probably would not have if they had been left on their own. However, there is a fine line between the kind of strict authority that builds up and the kind that tears down, and when it is crossed, it becomes questionable whether the Msgr. Fennessy style of authority wouldn’t be more effective on its own.
5. Someone might join a convent without much thought for the restrictions because they don’t see them really as restrictions, but simply the way things properly are, as necessary for the upholding of authority, or else because they see them as actually lending a stability to the religious life.

St. Nick's Parish

2009-04-01T19:39:00.064-04:00

The neighborhood of St. Nick's parish seems warm to me, but I think that it would be grating at times. It sounds like the kind of place I would like to get out of every once in a while, but always come back to.

People might insist on such obviously inefficient and unprofitable courses of action because they prized loyalty so highly. Ben Bohac may have made less money on each individual mortgage, but his good reputation as an honest lender who looked out for the best interests of the borrower probably gained him a greater number of customers. The personal relationship he built with his borrowers and depositors meant that they would never even consider taking their business to another bank. He may not have made large sums of money off of each customer, but he could count on their business for life.

Nepotism can be a good thing for employers and employees because it teaches everyone exactly what to expect. It creates a greater incentive for people to behave well, because they know that good behavior will reward their whole family and bad behavior will punish their whole family. When forced to realize that actions have consequences reaching beyond themselves, employees will act with more forethought.

To a certain extent, the softer authority of a Msgr. Fennessey does require the harder authority of a Fr. Lynch to back it up. Some people will do their duty with relatively little prodding, because they want to do it, but others need more incentive, other than their own desire. The position of harder authority does not need to be quite as belligerent as Fr. Lynch was, but it is still necessary to keep things running smoothly, unpleasant though it may be.

Someone might join a convent and "never think about the restrictions" because in the 1950's, there were restrictions to all facets of life, much more so than today. To a certain extent, joining a convent merely meant exchanging one set of restrictions for another, rather than having the added burden of additional ones. For example, Ehrenhalt mentions that women who chose to live unmarried in the community were put under intense social pressure, which was not present for nuns in a convent. Even if a woman did choose to get married, she would be prevented from pursuing her own interests if they conflicted with her role as stay-at-home mother and homemaker. If her family's finances were tight enough, she might be able to get a job outside of the home, but certainly not one that would provide even as much intellectual stimulation as teaching several dozen elementary students might for a nun. There were restrictions to every manner of life in the 1950's, joining a convent merely meant a different set of them.

The Parish of the Lost City

2009-04-01T18:57:00.002-04:00

1) To me the neighborhood of St. Nick's parish seems warm.

2) Courses of action that are obviously inefficient and unprofitable are not necessarily so for both parties involved. One group may benefit immensely while the other group suffers, but there is a bigger picture. Though Bertucci's and Bohac's businesses may suffer, they build a loyal base of support for future contracts and new customers. They are investing in a profitable reputation, which will reap long-term advantages against future competition and economic prosperity from loyal customers when faced with economic recessions.

3) If the business is profitable, nepotism is a good thing because it insures that future employers and employees will be just as devoted to their jobs as their predecessors. It also maintains discipline within the business because everyone wanted to help their family members get a job at the factory; yet if any employee misbehaved and had to be fired, none of their family would ever be hired by the company. Hence nepotism established a sort of "guild" identity in the work place where quality and responsibility was enforced for the sake of significant others.

4) No it does not but a distinction must be made as to the purposes of the authority of both priests. Msgr. Fennessy's authority was respected and honored by those Catholics who were faithful. The good Msgr. ws respected out of love for him and his service to the parish members. In contrast Fr. Lynch 's authority was also respected and honored by faithful Catholics, but more significantly by rebellious Catholics. Faithful Catholics respected priestly authority out of love regardless of whether it was Fr. Lynch or Msgr. Fennessy; yet rebellious Catholics despise authority, and would not respect Msgr. fennessy's authority but for the fear of incurring Fr. Lynch's wrath. Hence Fr. Lynch's authority was necessary for the rebellious Catholics, for if they would not obey out of love then they would obey out of fear.

5) Usually someone who joins a convent does so because they do not see holy discipline as restrictive. However this does not come from any religious devotion, because there are plenty of devout Catholic laymen who do see religious life as restrictive despite their devoutness. There are those who are blessed with that vocational calling see the "restrictions" and find freedom from worldly hinderance to pursue greater obedience to God's will.

Parish

2009-03-31T23:11:00.003-04:00

Does the neighborhood of St. Nick's parish seem oppressive or does it seem warm to you?
Consider people's fidelity to Bertucci's - or Ben Bohac's encouragement to borrowers that they should pay off their loans early. Why would people insist on such obviously inefficient and unprofitable courses of action?
How can nepotism be a good thing for employers and employees?
Does the kind of authority of a Msgr. Fennessy really require the kind of authority of a Fr. Lynch to support it? Does a good athlete require the sadistic gym teacher?
Why would someone join a convent and "never think about the restrictions"? I don't mean that their religious devotion leads them to yearn for the vows. I mean simply that they don't make any difference.

The Social Organism

2009-03-31T14:24:00.000-04:00

1. The medieval view of the relation between grace and nature in the economic sphere is that grace builds on nature, lifting it up and ordering it towards the final end. Thus, the necessary realm of economics is meant to be transformed in order to help society work towards eternal life.
2. Inequality between the different classes of individuals in medieval thought was necessary in order to protect the rights of these classes, but also to make sure that each executed the activities proper to it alone.
3. Guilds were theoretically meant to do such things as “check economic egotism…resist the encroachments of a conscienceless money-power…preserve professional standards of training and craftsmanship and…repress by a strict corporate discipline the natural appetite of each to snatch special advantages for himself to the injury of all.” Basically they were meant to help preserve the integrity of craftsmen both against injurious economic incentives. The ethical principles concerning economics in medieval times stressed that man’s real work in this life reaching Heaven, and while economic matters can help man in obtaining this goal, they can never be seen as prior to or separate from it in any way (economics without morality turns into sin, in other words).
4. Private property, in the medieval view, helps in that it offers an incentive to individuals to work harder and keeps men from arguing so much over ownership and utility; however this is only the case because of Original Sin. In a perfect world, men would own things in common, according to Tawney’s interpretation.
5. The medieval view of social mobility was that this was not to be one’s goal in life. One should earn enough to support oneself, but all within the class one belonged to, in order that society as a whole should function well, for the sake of the common good. Profit for mere gain was looked down upon as evil.

The Social Organism

2009-03-30T16:00:00.004-04:00

What is the medieval view of the relation between grace and nature in the economic sphere?
What was the role of inequality in medieval thought?
What was the purpose of guilds? What is the ethical principle that economic ethics, in the medieval view?
What was the medieval view of private property?
What was the medieval view of social mobility, of "working hard to improve your position"?

A Different World

2009-03-28T01:18:00.000-04:00

1.In 50s Chicago, a lot of the authority stemmed from the community. To the average person, they just had to deal with government, and the real authority was their peers encouraging them to do what is right. There was little to no privacy and very limited choices. People were not unhappy because they did not think of bigger and greater things. What is important to note is that there was a concept of evil that was real to them.
2.The market expanded Chicago, and it seems that it lost the sense of community it had before. It exposed the people to evil on a greater level, and it expanded the role of the individual in making choices. He uses the example of the factory which slowly broke away from the the town, as an effect of the markets.
3.Daley's corruption-filled machine, as the title of the chapter implies, accepts the fact that sin exists and the people are sinful. He uses that information to achieve his ends. It a more realistic and practical view than a squeaky-clean system. Cleaning up the machine takes so much effort, for marginal results, that it becomes completely inefficient leading to an entirely different and larger set of problems. I don't know if it reveals something deep about human nature, but it does serve to show that a human is a social being, and bureaucracy goes against human nature.
4.Betty Friedan exemplifies the conflict between prosperity in that she was successful yet crazy.

The Limited Life

2009-03-26T14:31:00.001-04:00

1. According to Ehrenhalt, community is built on lasting relationships which lend themselves to a fairly small degree of choice. It is thus the result of obedience to those in authority (who ultimately create the order of a community) and does not arise from increased individualism or having a wider array of personal choices available to one through the market.
2. Ehrenhalt says this because he believes that markets’ main goals are increased availability of options in order to create competition and encourage productivity and in doing so, they take the emphasis for the decisions that people make away from who it is that people know and have personal relationships with (and are loyal to) and place it instead on where one can get the best deal. He says that lots of people in many ways would actually rather have rules to follow and some kind of guiding authority, instead of being left completely to the impersonal forces of the market with it’s huge array of individual choice.
3. Daley’s corruption-filled machine presents an interesting dilemma because it is somewhat necessary in human relationships to work with people where they are at, but it is also seems wrong to accept sin for what it is without working to build up virtue in society through some kind of reform of the situations in which corruption exists. The fact that improvement in politics hasn’t manifested itself in better results, however, does not seem to be an argument for a return to the machine of Daley’s day even if it seemed to result in a better end product, if nothing else, simply because the ends should not justify the means. Nonetheless, the authority that Ehrenhalt stresses so much seemed to play a role in this machine (even if it was corrupt authority), and a return to greater authority would perhaps help better the current situation…
4. This conflicted state which was widespread in the 1950s manifests itself in Betty Friedan in that she was the winner of Coronet’s ‘mother of the month’ award, indicating that she was leading a successful life, both raising a family and working as an author on the side, but on the other hand, she was also obviously either personally affected by the neuroses of the day, or had been influenced by the general public attitude concerning them, as her featured story was about blossoming romance in the psych ward.

The World of Tradition

2009-03-26T08:44:00.007-04:00

1) The prerequisite for any community is law and order. For law and order to exist so that a community may exist, authority is necessary for the enforcement of the law.

2) Erenhalt says that the market is a force for disrupting relationships because as it modernized it replaced many middleman required to provide a specific product. Many of those middlemen were people with whom customers formed a professional social relationship such that consumers and local producers knew each other. The burden of choice he speaks of, is where the diffficult responsibility of discerning what is good from what is bad, and choosing the good. Before the market forces altered the fabrc of society it was the concern of those in authority; after authority was usurped it has become, through the market, a concern for the individual. Authority provided stability in many walks of life because it took care of the burden of being a moral compass, leaving society free to pursue its own interests confident that the morality of its social fabric was being carefully guarded.

3) Daley's political machine is very much in accord with a realisitc viewpoint of human nature. Cleaning up the machines hasn't reduced immoral externalities because the foundation for "cleaning up" was the decentralization of authority. Rather than target sin as the cause of corruption, it was authority which was branded the culprit. Rather than simply enforce the law, measures were taken to ensure abuses would "never happen again." This came in the form of more laws and extensive bureacracies for accountability; this made the enforcement of laws and measures to reduece externalities more costly, cumbersome, and inefficient. The fact that politics has become cleaner and schools becoming worse reveals that human nature needs authority. with properly formed morality, to prevent its own self destruction.

4) Betty Friedan is a good example of this conflicted state in that her short story relates how two mental patients, who are neurotics and thus incapable of having a true relationship, fall in love while in an institution, a place that is sterile and devoid of any true love. Yet despite the objective situation, love miraculously comes about within subjective circumstances. It is very possible Betty was relating her own stresses from motherhood and matrimony, and how they affected her idea of love and commitment. It is an amoral foundation, that in some way true love (which only exists in relationships that are morally ordered) can be found in places where it is not likely possible and that these two characters can be used as role models for relationships in the world of reality.

A Different World

2009-03-26T01:19:00.002-04:00

What is the connection between authority and community?
Why does Ehrenhalt say that "the market is a force for the disruption of existing relationships" and that choice can be a burden that lots of people prefer not to have?
Is Daley's corruption-filled machine more in accord with a realistic view of human nature than our idealist squeaky-clean systems? Why is it that cleaning up the machines hasn't produced better schools, safer streets, or more responsive government? Arguably, politics has gotten cleaner and the schools worse. Does this reveal something deep about human nature, or is it just a coincidence?
American society in the 1950s, according to the account in chapter 3, was characterized by a profoundly unsettled contentment - by unimagined prosperity and by neurosis and ulcers. How is Betty Friedan (see page 82) a good representation of this conflicted state?

Dogmatics of Conservatism

2009-03-24T14:42:00.000-04:00

1. Authority and property are the two central concepts in conservative philosophy. Authority is central because, according to Burke, ‘the first requisite of a society is that means exist for the restraint of men’s passions.’ A conservative view of authority is that it is seperated between family, church, and political government, with all three having a specific and unique role to play. Property is so central because it represents ‘the very condition of man’s humanness, his superiority over the entire natural world.’ Property in the conservative view is necessarily tied to family.
2. The corporate rights of states and local communities are important because, according to conservatives, they are needed in order to act as intermediaries between the national government and the individual in the formatino of a ‘chain’ of authority built upon the ‘social bond.’ Society and its customs are expected to give the individual a place as a member of the community, which in turn must be given the freedom of authority over the individual. In fact, when an individual’s rights are defended against the group to which he belongs, then he is actually tearing down the very authority which is making sure that his rights are respected, even when they are unspecified (for this is nothing other than a recognition that there is no power which can rightfully impede them.)
3. It should be hard for people to rise above their station because inequality of opportunity is what motivates men to better themselves. Freedom needs hierarchy in order not to dissolve into chaos and anarchy – there must be a ‘rule and order’ present, which protects the liberty of society’s members.
4. To the conservative, the market system runs the risk of being based too much upon personal needs and attempts for gain, as property is no longer tied necessarily to the family. The capitalist process takes the life out of the idea of property because within it, there is no longer any complete concrete ownership of anything, which abolishes the desire to guard what is owned, and even perhaps leading to socialism eventually.
5. The church, the family, and the village (with their consituent members) are all obliged to charity and quite seriously, as they are the ones closest to the needy, who can provide best for them. The government, then has a duty to strengthen and protect the social order, so that these groups are freely able to practice the virtue of charity.
6. Fervent devotion to religion is a problem for conservatives when it causes an invasion of one’s moral life into political life and seeks to enforce one’s ideas upon others. Religion is valuable for conservatives, however, in that a sense of morality and loyalty to one’s faith are important for the liberty of a society to be maintained and also in that the church can help balance the state’s power.

The Soul of Conservatism

2009-03-23T23:15:00.005-04:00

1) Authority and property are the two central concepts in conservative philosophy. Authority is central because it is the first requisite for a society, a means for the restraint of men's passions which would otherwise destroy society. Property is also central because it is more than a mere appendage to man, it is the very condition of man's superiority over the natural world.

2) Conservatives would emphasize corporate rights over individual rights because groups of individuals (corporations, guilds, classes, communities, etc.) served as intermediaries between the individual and the larger political power. These groups made weak individuals strong because they organized collective opposition against the larger political power of the state. As Tocqueville declared, these intermediate associations are necessary in democracies because, by their very existence and the loyalties they win from their members, they offset the power of the social democratic state. An individual is worse off when his rights are defended against the groups to which he belongs because it separates him from the shelter of the organization; it makes him more vulnerable and submissive to state power.

3) It should be hard for people to rise above their station because they will appreciate their staus much more than if it were handed to them, and as a result more prudent in their judgment about how to employ their newfound prestige in service to their community. Equality of opportunity is a bad thing because it involves using law and government to deliberately hinder the liberties of individuals more successful than others in their endeavors. Freedom requires hierarchy because hierarchy allows the existence of functional social consensus.

4) To conservatives, the market system as whole has corrupted the concept of property ownership. Land has become a commodity rather than a basis for a way of life; land used to justify itself as a form of wealth but now it is seen as a form of soft wealth, wealth to be partitioned and traded for currency to invest in banks or stocks. The capitalist process takes the life out of the idea of property by making the factory and it machinery as the means of a worker's subsistence. Yet this was after the Industrial Revolution made the factory a reality; prior to that it was the rise of land speculation, which reduced land to a commodity to be bought and sold according to its commercial value.

5) All Christians are obliged by charity, and the obligation is serious enough that it comes after the payment of debts. In that context the primary purpose of government is to prevent evil insofar as it does not interfere in the affairs of local subsidiary.

6) Fervent devotion to religion is a problem for conservatives because they seek to establish a sphere of religious influence that is separate from the state yet at the same does not demand political loyalty from its followers. What is sought is a civil religion that can be manifested both religiously and politically, a religion that can politically exploited if necessary. Religion is valuable to conservatives because it provides a moral compass, a keystone for any society. If people were "liberated" from religious orthodoxy, they would be subject to many fears and aberrations of both an emotional and psychological nature; they would only be relieved by the periodical enthusiasm that distracts them from their spiritual starvation.

Conservatism: Authority, Liberty, Property, Religion

2009-03-23T14:21:00.002-04:00

What are the two central concepts in conservative philosophy, and why are they so central?
Nisbet says that conservatives would emphasize the “corporate rights” of states and local communities against those who would maximize the rights of the individual. Why? What is society and its customs expected to do for the individual? How is an individual worse-off when his rights are defended against the rights of the group to which he belongs?
Why should it be hard for people to rise above their station? That is, why is equality of opportunity a bad thing? Why does freedom require hierarchy?
Nisbet says that certain customs were designed to protect the family character of property … not from the grabbing hand of the State, but “from becoming the uncertain, possibly transitory, possession of the individual alone.” How does a conservative, then, view the market system, as a whole? How is it that “the capitalist process [takes] the life out of the idea of property”?
Who is obliged by charity? How serious is this obligation? In that context, “what is the primary purpose of government”? I think that Nisbet must have read Centesimus Annus, 48.
Why is fervent devotion to religion a problem for conservatives? Why and in what way is religion valuable for conservatives?

Conservatism

2009-03-19T14:57:00.001-04:00

1. According to Nisbet, Burke saw the French Revolution as “leveling in the name of equality, nihilism in the name of liberty, and power, absolute and total, in the name of the people…[It] was far less interested in the actual and the living…than in the kind of human beings the Revolutionary leaders believed they could manufacture through education, persuasion and when necessary force and terror.” Burke’s issue was that the traditional social order of feudalism which (in his eyes) held his country together was being destroyed, with an undue emphasis being placed on the individual (especially regarding property being taken away from the aristocracy and the Church by the state, etc.) and the role of cold, hard reason being regarded as the highest virtue.
2. Jeremy Bentham’s complicated ideals make him difficult to label, but he appears to be a libertarian in a certain limited sense, but also a lift-liberal in many more ways. For example, his theories revolving around individual interests and being able to pursue one’s happiness sound somewhat libertarian, but attempting to achieve the “greatest good to the greatest number” based upon a centralized utilitarian authority and things such as the professional civil service sound more left-liberal in nature.
3. Simple solutions for a conservative run the risk of being out of accord with reality and the needs of the people for whom they are designed – they are perhaps too idealistic. Prejudices in economic and political decision, according to Burke are necessary and a good thing, as they arise from history and tradition and are what ensure the protection of liberty in society.

Conservativism

2009-03-19T14:54:00.003-04:00

1) Burke was against the French revolution primarily because it was a primary example of a people trying to redefine the spirit of man and going about that task with a power struggle. The value of the staples of human society -- church, guild, family, town, etc. -- were completely tossed about or tossed out. These staples tied man to the real world; instead, the Revolution with it's eventual consequence of rampant individualism would lead to a world where each man was tied only to himself.

2) Jeremy Bentham is best characterized as a left liberal. He directly espouses extreme utilitarianism -- separating all decisions from anything other than cold reason. But the consequence of this is shown to be all the hallmarks of left liberalism: swollen bureaucracy, a spirit of "permanent reform", "bloodless charity", and the notion that essentially, the past if of no use for man.

3) Simple solutions rarely ever take into account all of the complexities that go into societal ills: no one stop shopping for society! They create inefficiencies or cause other secondary problems. Prejudices are almost everything in economic and political decision making. They are the original position, the base upon which one stands when he surveys the landscape and identifies problems. Based on these starting points, these prejudices, one man might identify something as a problem that another man sees as fitting in perfect harmony with the rest of society.

Conservative Tradition

2009-03-19T08:59:00.002-04:00

1) Burke was opposed to the French Revolution because of its soul which was individualistic and militantly rationalist. He believed that its influence was corrosive to contemporary culture of Europe during the 18th century. During that time Europe, particularly Germany and Eastern Europe, was going through a period of traditionalism where it was fascinated with the culture of the Middle Ages. At the center of this fascination was the Catholic Church which still had considerable numbers of philosophers and theologians committed to orthodox teaching, rather than the naturalist movement of the time. As more philosophers declared the enlightenment of their doctrines, the more philosophers and professors in religiously oriented universities appealed to the traditions of Medieval Europe. In addition to Church influences, historic towns and guilds throughout Western Europe increasingly turned to family, native traditions, saints, scholars, heroes and crafts. Instead of going off to the capital cities of Europe, which were the beacons of the Enlightenment, poets, composers, performers, artists, artisans, analysts and chroniclers stayed and prospered within their own communities. All of these contributed to a traditionalist revival within Europe that established an elite culture that was being destroyed by the French Revolution. As the Revolution gained momentum, guilds in France were banned and the patriarchal family was condemned as against nature and contrary to reason. Marriage was declared a civil contract and grounds for divorce were formalized.

2) Jeremy Bentham would have to be neither. Since he was an advocate of utilitarianism he would have to be a relativist because utilitarianism can be accepted or rejected by libertarians and liberals alike. He was also an advocate for animal rights yet he was opposed to natural rights. He favored libertarian policies such as individual and economic freedom yet he also favored leftist-liberal policies like the decriminalization of sodomy.

3) The problem with simple solutions for conservatives is because the problems have been made complex due to liberal policies such that other issues besides money have become reasons why a school is good or bad: teacher quality, content of the curriculum, etc. As to prejudices in economic and political decision-making, they influence whether the decision-maker sees an issue as a problem in the first place. Some maybe leaning towards liberal prejudices and they see equal availability of education as more important the quality of the education and would be opposed to any measure that improves schools at the expense of equal availability. Yet others may lean towards libertarian prejudices and see equal availability of education as irrelevant because school vouchers would allow equal availability while improving the quality of schools through higher funding. Higher funding would allow higher pay for better teachers and better teaching materials, technology, etc.

Conservatism: Sources, History, Custom

2009-03-18T16:03:00.003-04:00

Why was Burke so opposed to the French Revolution? (hints: individualism and rationalism; class, family, property; church, town, guild)
From the book’s description, would you call Jeremy Bentham a libertarian? A left-liberal? Both? Neither?
School vouchers are a simple solution. For a conservative, what’s wrong with simple solutions? What is the role of “prejudices” in economic and political decision making?

Unequality

2009-03-17T14:47:00.003-04:00

1) Three reasons for the increased returns to education: advance/development of technology requiring relatively more skilled labor, increase in labor supply (immigration) leading to a relative decrease in available unskilled jobs, and political hostility to unions which traditionally champion unskilled labor. These increased returns to education cannot explain the inequality increase, though, because within the skilled labor group there are still vastly diverse wages.

2) CEO salaries are ultimately set by boards of corporations, which decide on the salaries based on many factors, the greatest of which would probably be marginal productivity, which is measured by the increase of corporate well-being under a particular CEO.

3) Three words: inequality begets inequality. Poor people tend to stay poor through no fault of their own.

4) Krugman would say: It depends on what measure of productivity we as Americans are using as the basis of our argument. Basically, by other reliable measures (productivity per hour, etc.) the French are actually MORE productive.

Inequality

2009-03-17T13:50:00.001-04:00

1. Krugman talks about how the return to education is greater due now due to technological advancement (requiring more skilled workers to perform jobs), immigration (which tends to increase competition among lower-educated workers, creating an incentive to better one’s education) and increased international trade (as much of what the United States exports is skill-intensive). However, he says that ‘greater returns to education’ alone doesn’t explain the rising inequality gap because many of those who have a similarly high level of education still earn vastly unequal incomes (he quotes the large difference in income increases for CEOs and school teachers, both of which generally earn a master’s degree).
2. Krugman says that CEO wages are decided by compensation experts (who evaluate their performance value), and that these experts are hired by corporate boards, which consist mainly of members selected by the CEOs themselves. Krugman claims that the matter of determining executive pay is inevitably a subjective matter, but ideally it would be based upon company profitability, in which case, the marginal productivity of someone like Charlie Prince or John Thain could never justify the high wages they received.
3. Table 10 is comparing college graduation rates of four groups of students (1. Those whose parents were in the last fourth in regards to socioeconomic status and who also scored in the bottom quartile on a math test 2. Those with parents from the same quartile, but who scored in the top fourth on the test 3. Those who also scored in the top fourth, in addition to having parents in the top quartile, and 4. Those who had parents in the top fourth, but whose test scores were in the bottom quartile). Krugman claims that the importance of socioeconomic status is proven by the fact that group 4’s graduation rate is higher than group 2’s. However, while the numbers lend some evidence to his proposition, the difference shown is only 1 percentage point, which doesn’t seem to prove his point (that equality of opportunity is non-existent in the United States) very strongly.
4. Krugman responds to the objection by claiming that French unemployment is concentrated mainly among the old and the young, and by saying that the fact that the young do not work is not necessarily negative, as it may reflect an increased importance placed on education instead. He then goes on to address the older unemployment issue by attributing it to bad policy, such as too low of a pension benefits eligibility age. Regarding the overall lower productivity of France, he actually states that for those who work, their productivity per hour is actually larger, perhaps due to vacation regulations (which are also helpful for raising ‘life satisfaction’).

Inequality: Krugman's "Inferno"

2009-03-17T08:51:00.002-04:00

1. Three possible reasons why over the last thirty years the return to education has risen are: a rising demand for skilled labor due to advances in technology; changes in economic institutions and norms; and political hostility to unions. "Greater returns to education" are not enough to explain the inequality because the institutions-and-norms explanation of the current increase of inequality links current events to the dramatic decrease in inequality that took place in the 1930s and 1940s.

2. Idealistically CEO salaries are set based on each executives quality of work, which could be their blessing or curse in the competition of being hired by the most profitable corporation. Yet the reality tends to be more socially based, meaning the corporate board hires CEOs based on whether the prospect would be the best public face for the company. As to measuring the marginal productivity of a CEO, the standard is too subjective to be accurate.

3. Table 10 on page 248 shows data comparing key results from mathematical tests that were given to 8th graders sorted according to talent and family economic status. Its purpose was to give support to the hypothesis that inequality of outcome is the direct result of a lack of equality.

4. Krugman responds that as compared to the American labor force, France has a smaller fraction of a population that is employed. Though French GDP per worker is lower than American GDP per worker, it is due to French workers getting more paid vacation time: they put in only 86% as many hours each year as compared to American workers. Yet worker productivity per hour is higher in France than in the United States. Krugman advances the premise that question should be what aspects of the French system are problematic and which are alternative and perhaps better choices than the those of the American system.

Krugman on Inequality

2009-03-16T16:05:00.002-04:00

Suggest three reasons why the return to education has risen in the last 30 years. Why are “greater returns to education” not enough to explain the increase in inequality over the last 30 years?
How are CEO salaries set? How do you measure the marginal productivity of Citibank's Charlie Prince or Merrill Lynch's John Thain?
Discuss Table 10 on page 248.
“France is great because of the huge welfare state.” We would answer, “But French unemployment is huge and the French are very unproductive.” How does Krugman respond to our objection?

Liberty & Freedom

2009-03-11T01:21:00.004-04:00

The difference between “effective” and “formal” freedom is that in formal freedom you are technically free to do something, although not necessarily able. Freedom is limited by how much effective freedom you have, you are not really free just by being formally free, but you can’t be free without being formally free. You are technically free to buy a mansion, but not effectively free.

Arguably, necessary effective freedoms trump superficial formal freedoms, but the tricky part is that “positive” changes to effective freedoms now may not have positive effects in the future. Formal freedom is necessary for effective freedom.
The benefits of formal freedoms may not be immediately accessible by everyone, but it may not justify artificially inflating effective freedoms. Formal freedoms that are not immediately accessible become private goals, which motivate progress. The person who sees it this way is ultimately also concerning themselves with effective freedom.

St. Paul, in Romans 7:19, is emphasizing effective freedom. That does not take away from the importance of formal freedom. Effective freedom to the max would seem like you have no free will over a choice on whether or not to do something. You freedom would not be completely effective if you did not choose to effect it, this situation is of course, only hypothetical.

You’re right to own property, in its most basic sense, is absolute. It would seem though, that the most basic sense is only a theoretical concept. There are varying degrees of justified claims on property and the person with the most claim to it, is entitled to it. That is to say, that if you are paid by a manager whole cheats customers, the customers do have a claim over your wages, but the majority of the claim is yours, and the debt falls on the manager. Lack of absolute certainty does not detract from claims to property. If a claim to private property is always measured the same way, everyone would have the same disadvantages and advantages. If an economy were not based on private property, what would it be based on?

"It is easier for a camel to go in through the eye of a needle than for a rich man to enter the Kingdom." That is an interesting quote, but all the same, contextually inapplicable when the poorest people now are better off than the richest then.

“By nature all men are equal in liberty, but not in other endowments.” - Thomas Aquinas

Poverty Alleviation for Capitalists

2009-03-05T14:54:00.004-05:00

1) The argument he uses against externalities is the fact that the extra taxes used to cover the external cost would bear on low-income people, which is undesirable. Against aid to the poor, he argues that it would be more beneficial to give them cash instead of cash in the form of housing. For the paternalistic justification he argues that there is no guarantee that the adults (i.e. parents) would be responsible enough to see to the welfare of their children. I do agree with his arguments.

2) The premise of the stereotype assumes that business people run businesses on moral principles, or the lack thereof. While moral principles are a part of running a business, Friedman's example shows that most business decisions are also made on the premise of what is economically smart. What the northern trade unions and northern firms did was neither good nor evil, it was good business sense exercised to ensure a balance of competition with southern businesses.

3) If there is any justification for supporting people simply because they are past working age, Friedman finds none. However there is a familial obligation for children to take care of their parents in their old age. Another factor that is ignored is God's providence, he will not permit those in want to go aided. Thus the concern for those in need is relatively unjustified because God inspires the generosity in those who have plenty to give to those in need. Thus the poor should never worry where they will get their next meal, as God will see to their sustenance as He does to their salvation.

Welfare Politics

2009-03-05T14:10:00.007-05:00

1) Most of the New Deal is considered the essence of political moderation because of accidents of history. In the wake of the economic catastrophe of 1929-33, the credibility of the old elite and its ideology was shattered; the recovery which began in 1933, though limited, lent credibility to the changes of the New Deal. The human catastrophe of the Second World War created conditions which made large-scale government intervention necessary. Both catastrophes combined to sweep away the skepticism about the radical measures of the New Deal. By the time Eisenhower became President, New Deal policies were part of the fabric of American life.
2) According to Krugman, those voters who were usually poor (aside from blacks) tended to support Democrats in general and a strong welfare state. These same voters were also disenfranchised due to their poverty, so it removed part of the left side of the political spectrum. After severe immigration restrictions were imposed in 1924, the fraction of the population without the right to vote steadily dropped. By the fifties, relatively poor whites were able to avail themselves of their right to vote due to better economic conditions. The result was a shift to the left in the American electorate.
3) According to Krugman, the South politically supported Democrats (besides voting against Lincoln) in the 1950s because the Democratic Party tacitly accepted Jim Crow laws. Socio-economically the South supported the Democrats because under the New Deal, the South
would recive huge economic relief because it was much poorer than the rest of the country. New Deal programs such as Social Security, unemployment insurance, and rural power were
very important to low-wage earners who made up most of the South's population.
4) Table 2 on page 73 give numbers for three Congresses during specific economic periods: the 70th Congress, 1927-29; 85th Congress, 1957-58; and 108th Congress, 2003-4. The table shows that congressional partisanship was much less intense in the 1950s than it was before the New Deal, or as is it is contemporarily. In each measure more overlap indicates a less polarized political system, while the absence of overlap suggests that there is not a strong political center. Table 3 on page 76 compares the average voting patterns of white voters grouped by income level in presidential elections between 1952 and 1972 on one side and 1976 and 2004 on the other. It is intended to show the strong relation between higher income levels and voting Republican.

Poverty Alleviation

2009-03-05T14:10:00.002-05:00

1. Friedman argues against the externalities, not by denying their possible existence, but by saying that all that they would justify is increased taxation on the house types that contribute to these extra social costs, not subsidized housing. He argues against “aid to the poor” subsidized housing by claiming that it would actually be better to give cash subsidies so that low-income families could spend it on what they needed most (this could include housing, if they so desired). The paternalistic approach is rejected on the grounds that it violates the freedom of responsible adults to make their own choices (he does concede that this argument may partially work for the children who are indirectly affected). However, he seems to leave certain considerations out, such as the fact that cash subsidies may very well be used in a manner that increases neighborhood effects (if used on things that are not actually what low-income families need), and he also does not go into enough detail concerning the indirect effects on children that may be a means of justification.
2. One could say that it is not that libertarians think business people can do no wrong, it is rather that they believe that business transactions are the best way of benefitting both sides, but only if they are freely entered into in a fully-informed manner. Thus, one would not have this situation that Friedman talks about on page 181 if wages were determined in the free market because those self-interested parties would not be able to find others with which to enter into transactions with.
3. Friedman believes that there is no morally acceptable argument for supporting people on the grounds of their being over a certain age. He believes that while it may be good to want to help poor people (and even if that may be one of the effects of OASI), there is no reason why it should be accomplished in that way, choosing an arbitrary age as the grounds for aid.

Friedman on Poverty Alleviation

2009-03-04T14:04:00.005-05:00

A couple of points (not questions):
a) The effect of minimum wages is actually very controversial.
b) A 50% stock market drop causes us to rethink the relative merits of private versus public retirement accounts.
c) The Conclusion (ch 13) is a splendid summary: study it carefully.

Friedman on Poverty Alleviation

2009-03-04T14:02:00.003-05:00

The argument in page 178 is very interesting, but certainly not unassailable. What are the arguments he uses to reject the “externalities”, “aid to the poor”, and “paternalistic” justifications of subsidized housing? Do you agree?
Stereotype: “Libertarians are naïve: they think business people can do no wrong.” In page 181 Friedman says that often do-good policies are supported not by do-gooders but by self-interested parties. How could someone use this example to dispel that stereotype? This point is actually very deep: go back to page 13, to how “the liberal regards the problem of social organization.”
Is there any justification for supporting people (poor or not) simply because they are past working age?

FDR Madison Square

2009-03-03T11:30:00.000-05:00

In a way, rhetoric such as that used by FDR in his Madison Square Garden speech would probably be quite politically effective today, in view of things such as the current financial crisis and war on terror. By looking at President Obama’s Democratic Nomination Acceptance Speech, one can see certain similarities: “government…should do is that which we cannot do for ourselves - protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology… It should ensure opportunity not just for those with the most money and influence, but for every American who's willing to work,” or “We measure the strength of our economy not by the number of billionaires we have or the profits of the Fortune 500, but by whether someone with a good idea can take a risk and start a new business, or whether the waitress who lives on tips can take a day off to look after a sick kid without losing her job…,” or “in an economy like this, the last thing we should do is raise taxes on the middle-class,” or “The Bush-McCain foreign policy has squandered the legacy that generations of Americans -- Democrats and Republicans - have built, and we are here to restore that legacy.” Thus, it seems that this kind of rhetoric is what America would listen to right now.

Politics of the Welfare State

2009-03-03T11:12:00.003-05:00

1. Krugman says that these policies of the New Deal were synonymous with political moderation by the time of the 1950s because by then, things such as the Great Depression (which drastically lowered confidence in big business) and World War II (which got the government involved in the economy in a positive way) had enabled the ideas of the New Deal to take root and to flourish (largely free from any kind of government corruption).
2. Krugman claims that as more and more of the large number of immigrants (who were most often poorer and thus supported things such as the welfare state) in the United States became citizens, the voting population was significantly changed towards a more Democratic viewpoint.
3. The South supported the Democrats because it was not nearly as rich as the North and had much to gain from the New Deal policies.
4. Table 2 is showing both how many of the minority party are to the opposite side of the most extreme member of the majority party (measuring overlap) and also how many of the minority party are in a sense on the side of the majority party (measuring crossover); in the 85th Congress, according to this Table, there was much more overlap and crossover than in the 70th or 108th, meaning that there was a stronger political center. Table 3 shows the proportion of voters who were white that voted Democratic according to their income class; there was less variation in the ‘52-’72 years than in the ’76-’04 time span (in other words, less of a tendency for the rich to vote Republican, also presumably showing a stronger political center in the first time period)

2009-03-03T10:38:00.001-05:00

Good stuff from David Brooks

Those of us in the moderate tradition — the Hamiltonian tradition that believes in limited but energetic government — thus find ourselves facing a void. We moderates are going to have to assert ourselves. We’re going to have to take a centrist tendency that has been politically feckless and intellectually vapid and turn it into an influential force.
The first task will be to block the excesses of unchecked liberalism. In the past weeks, Democrats have legislated provisions to dilute welfare reform, restrict the inflow of skilled immigrants and gut a voucher program designed for poor students. It will be up to moderates to raise the alarms against these ideological outrages.
But beyond that, moderates will have to sketch out an alternative vision. This is a vision of a nation in which we’re all in it together — in which burdens are shared broadly, rather than simply inflicted upon a small minority. This is a vision of a nation that does not try to build prosperity on a foundation of debt. This is a vision that puts competitiveness and growth first, not redistribution first.

The Politics of the Welfare State

2009-03-03T09:55:00.000-05:00

Why is most of the New Deal “the essence of political moderation”? (E.g., laws that support workers, progressive taxation, Social Security, unemployment insurance, farm support programs)
In Krugman’s story, the electorate “moved to the left” as the number of disenfranchised voters declined. What happened?
Why did the South support the Democrats? (besides the “voting against Lincoln” thing) What were the socio-economic reasons for why Democratic politics were more attractive to Southerners?
Explain Tables 2 and 3, in pages 75-6.

FDR’s Madison Square Garden speech

2009-03-03T09:51:00.004-05:00

FDR’s Madison Square Garden speech (here) is even more radical and angry than Krugman reports. However, it’s interesting to note that FDR says that those who voted for him in 1932 had

sought escape from the personal terror which had stalked them for three years. They wanted the peace that comes from security in their homes: safety for their savings, permanence in their jobs, a fair profit from their enterprise (emphasis added).

It’s probably accurate to say that FDR wanted to present himself as a defender of the little business guy against “monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering”, as he announced

Of course we will continue our efforts for young men and women so that they may obtain an education and an opportunity to put it to use. Of course we will continue our help for the crippled, for the blind, for the mothers, our insurance for the unemployed, our security for the aged. Of course we will continue to protect the consumer against unnecessary price spreads, against the costs that are added by monopoly and speculation. We will continue our successful efforts to increase his purchasing power and to keep it constant.

Do you think this political rhetoric would be successful nowadays? Why?

Equality

2009-03-02T18:31:00.028-05:00

Rawls' maximin is not strictly an egalitarian position because it seeks to maximize the position of the worst-off members of society, regardless of their position relative to everyone else in that society. For example, the principle of maximin says that it is better for some people in a society to have 25 of a certain thing and others to have 40 than for everyone to have 20. Everyone having 20 would be the egalitarian ideal, because each member of society has the same amount, but according to maximin, it is better for the worst-off people to have more, even if it is less than other people have.

In the theory of spheres of inequality, unequal distribution of money is okay as long as it is caused by people's ability to make money and it doesn't influence the distribution in other "spheres" like education, politics, or health. Inequality is only bad if it is not justified by a person's ability to make money. For example, it is just fine that a person who makes more money drives a nicer car than someone who makes less, but it would be wrong for the richer person to have more influence in the political process than the poorer person does.

It would be good for GDP if poor, smart kids were helped into better schools because they would then have the education necessary to become more productive adults. This might be inefficient in the short run, but in the long run it would be efficient as long as these children produced more as adults because of their education than the extra cost of helping them into that education.

2009-02-24T14:59:00.003-05:00

“To each according to what he and the instruments he owns produces.” Friedman denies this is an ethical principle because it is not related to morality or right behavior -- it is related to the fundamental freedom that a man enjoys by virtue of being a man.
"Allocation of resources without compulsion." The state is the keeper and enforcer of the law, without which the order the comes from the market could not exist.
Inequality can serve the good of society by virtue of the fact that wealth produces wealth. The principle that with more, more can be done -- so with more wealth in the hands of some, more wealth can be made for the good of all. Yes, capitalism and some types of inequality go together necessarily.
No, because the progressive tax restricts freedom, a fundamental right, on those who have more. It imbalances the system that would use large amounts of wealth to produce more wealth, rather than taking extra from the wealthy.

Chicago Tea Party

2009-02-24T12:52:00.003-05:00

"We're going to debate the moral issues of what government is and isn't doing for some years to come."

Distribution of Income

2009-02-24T11:36:00.000-05:00

1.The capitalist ethic is “To each according to what he and the instruments he owns produces.” Friedman believes that it is necessarily associated with some other higher principle, perhaps freedom.
2. The major instrumental role in the market place of distribution in accordance with product is “the achievement of allocation of resources without compulsion.” The market based on voluntary cooperation relies on payment in accordance with product in order to maximize its effective resource usage as each man attempts to satisfy his unique needs and wants. Nonetheless, the state must still be present in order to define and enforce the laws of property rights which arise from the capitalist principle.
3. Inequality has several beneficial roles – it works as a check to any attempt to centralize political power, it gives rise to “patrons” who enable the spread of ideas that may otherwise never be heard or who back new research and innovations, and it also acts as an arbitrary force coordinating the distribution of goods by means of a market. Thus in this sense, capitalism is necessarily associated with a certain amount of inequality, but not as extreme or as permanent of inequality as is found in non-capitalist societies.
4. Progressive taxation does not seem to be consistent with liberal principles because not only does it gives rise to arbitrary inequalities for people within the same economic level (and also has the effect of slowing further wealth accumulation), these things are the result of lost individual freedom and coercion by an outside force.

Capital Equality

2009-02-23T21:50:00.004-05:00

The "Capitalist Ethic" according to Friedman is: "To each according to what he and the instruments he owns produces." Friedman finds this principle unethical because the "operation of even this principle implicitly depends on state action." In the market place of distribution the major instrumental role is distribution according to product. Yet Friedman says that even this principle needs the state because true equality would require payment in accordance with product. Though the essential function of payment in accordance with product in a market society is to enable resources to be allocated efficiently without compulsion, it is unlikely to be tolerated unless it is also regarded as yielding distributive justice. No society can be stable unless there is a basic core of value judgements that are accepted by the majority of society, and this is embodied in the form of the state. Inequality has a beneficial role to play in that it is a producer of equality of treatment. This is illustrated by a simple lottery where a group of people have equal endowments and all agree to enter the lottery with unequal prizes. The resultant inequality of income permits the individuals in question to make the most of their initial equality. According to Friedman a capitalist system is characterized by considerable inequality of income and wealth. Yet this inequality has more to do with people's expectations regarding the source of income. The more capitalistic a country is, he smaller the fraction of income paid for the use of capital , and the larger the fraction paid for human services. Hence the great achievement of capitalism has not been the accumulation of property, but the expansion of opportunities to develop and improve the potential capacities of men and women. Progressive taxation is not consistent with liberal principles because it is ususally used to redistribute income. Using taxation to take wealth from some and give it to others is a clear case of coercion, which conflicts with individual freedom.

Liberalism and Distribution

2009-02-23T13:19:00.003-05:00

What is the “capitalist ethic”? That is, what is the principle that justifies distribution of income according to a free-market process? Friedman finds that this principle "cannot, in and of itself, be regarded as an ethical principle."
What is the major instrumental role in the market place of distribution "in accordance with product"? Why does he say that even this principle needs the state?
What are the beneficial roles played by inequality? Do capitalism and inequality go together?
Is progressive taxation consistent with liberal principles? Why or why not?

The Business of Business being Business

2009-02-19T14:52:00.003-05:00

1) With regard to CEO's, as with many things, it depends on what is meant by "any responsibilities besides maximizing the value of the owner's shares."

In a certain sense, that's right.

My esteemed colleague, neelhtak, notes the exception “so long as it stays within the rules of the game…without deception or fraud.” This is part of the way in which it can be said that CEO's have other, more important responsibilities -- like the basic responsibilities to truth telling, against fraud, etc. But those are responsibilities that each and every employee (human person) has. As CEO, a person's mission is to maximize the value of the owner's shares. As human person, a person's mission is to speak the truth always, act in accordance with prudence, justice, temperance, and fortitude, etc. Anything that can be said of man simply still applies to CEOs, and anything that can be said of leaders simply still applies to CEOs.

2) Unions are necessary and good only in as much as they check the all-too-often-seen tendency of markets to begin to treat laborers as merely tools to be used. In as much as a union does damage to the conditions of workers (even if they are not the workers represented by said union), then a union has crossed the line and ceased to be the type of institution that the popes defend.

Amen.

Who's Responsible?

2009-02-19T13:41:00.000-05:00

Friedman’s belief that maximizing the value of the owners’ shares is the only responsibility of CEOs (“so long as it stays within the rules of the game…without deception or fraud”) seems to make sense in that when social choices are left up to the individual rather than those who are in the leadership of a business, a better situation economically and politically is created for all. However, it seems wrong to say that those in charge of a business should have no kind of responsibility for the way that their actions affect society, especially as regards the ways in which they seek to gain profit. For example, the lowest-cost method of producing a good may not always respect the rights of those producing the inputs, such as in the case of imports from countries which use slave labor, or labor with inhumane conditions. In this case, if the only interest were profit, it would not be in the interest of the shareholders for CEO to concern themselves with these matters, yet society (at least in one part of the world) would suffer for this.
Friedman condemns unions on the grounds that their wage negotiations actually reduce jobs in the industry which they are trying to help, which means wages must actually be lowered in other industries as the unemployed attempt to find work in other areas. This eventually ends up making the lower-class workers worse off and the higher-class ones better off. It does seem right that unions can have this negative effect in regards to wages, and may actually end up hurting the working class. Thus, in this case, they may actually be working against the ‘securing of the rights of workers’ that the Popes encouraged (who have also stressed unionization for the sake of ‘solidarity,’ which seems commendable, however).

The Business of Business is Prosperity with Justice

2009-02-18T18:51:00.003-05:00

CEOs do have responsibilities aside from maximizing the value of their owner's stock shares. CEOs are not just workers, or employers, they are providers. They provide jobs for their workers, and as job providers they have a responsibility to give them a just wage. They also have a duty to see to their family's needs, meaning reasonable working hours. Workers should not be worked to the point that their relationships suffer. CEOs also have a responsibility to the public to limit business externalities such as pollution. CEOs also must see to the safety of their employees through work environments where risk is minimized. These and other responsibilities are outlined in Catholic social teaching, and they contribute to true justice in the working world.

The Business of Business is Business

2009-02-18T09:16:00.001-05:00

Do CEOs have any responsibilities besides maximizing the value of the owners’ shares? Why or why not?
The Popes have traditionally upheld labor unions as important (particularly Laborem Exercens, 20; also Centesimus Annus, 7 and Quadragesimo Anno, 35). What are the reasons for which Friedman condemns (at least certain kinds of) unions? Do you think he is right?

This Morning's Breakfast: the Politics of Inequality

2009-02-17T13:05:00.003-05:00

1) Krugman first argues that it was the economic inequalities which caused political partisanship, but this argument is quickly dismissed as his original, uninformed view. Ultimately, he argues, political partisanship is the cause for economic inequalities in America, especially in America today. As evidence of this, Krugman cites the 2-3 decades following the second World War, when political parties weren't so different on the issues and were willing to work together, and when Democrat didn't mean liberal and Republican wasn't synonymous with conservative. With a large part of the population espousing "movement conservative" ideals, society moves more towards economic inequality, allowing the rich to get richer while the poor do not get relatively richer. Thus, it is political disunity that causes economic inequality.
[Breakfast Eater's response -- GAG ME! This sort of argumentation is paraded as having some solid foundation in economics?]

2) The economy today is like to the economy of the 1910's because both are at the bottom of the political bipartisanship/economic equality arc which pervades in "modern American history." While most of the characteristics of the political and economic scene today are different from those of 1910, there is still a stricking similarity in the economic inequalities and political divisiveness. In the 1950's though, in the wake of the New Deal, relative political unity had brought about the emergence of a huge, highly uniform middle class -- which, Krugman argues, is highly unlike the economic circumstances of the turn or end of 20th century America.
[Breakfast Eater is getting hungry -- I eat Economics for breakfast, not pseudo-historical wanna-be amalgamations of politics and economics. Apparently I'm not on the South Beach diet, I'm on the Krugman diet.]

3) The Populist party could not win during the early years of the 20th century because it was a) underfunded -- the Republicans and/or Bourbon Democrats had the unwavering and overwhelming campaign support of the super-wealthy elite; b+c) uncommitted to building essential bridges between Populist-friendly sectors of society. The first lack-of-bridge Krugman describes is the inability for the majority rural population to unite with the urban population. This failure was shown to be the product of the vast differences between mostly WASP farmers and mostly immigrant urbanites. The second lack-of-bridge Krugman gives is the inability for the white Southern population to unite with the black population -- even though, as Krugman describes, both groups had very similar interests.
As a side-note, Krugman did list voter fraud as b) above, but he also said that it was widely practiced by all sides and the side with the most purchasing power usually dominated -- which really only points to reason a). I therefore substituted the two major conflicting groups as two separate reasons for Populist failure.

4) Krugman points to the efforts (many of which were ruled unconsitutional) of Maryland, Pennsylvania, Nevada, Wisconsin, Montanna, and other states as the true beginnings of the welfare state in the U.S.

American Inequality

2009-02-17T00:17:00.001-05:00

1. In Krugman’s view, political polarization was the cause the eventually produced the effect of economic inequality. He claims that radical Republicans in the 70s (attempting to undo the New Deal) created a gap between parties and enabled businesses to overpower the unions, leading to a decrease in bargaining power for workers. He also believes that this new hard right took away social and political barriers previously restricting the exorbitant pay of executives, all the while diminishing taxes on the wealthier citizenship. He backs up this order of causality by speaking of the effects of FDR’s policies, by claiming that temporally, political change happened before economic change did, by downplaying the effect of technological growth, and by showing that the United States’ rise in inequality is unequaled in other similar foreign countries.
2. According to Krugman, the economy today has swung back into a stage of stark inequality similar to before the New Deal days. He states that “income inequality [today] is as high as it was in the 1920s,” contrasting this with the post-war era, where there was a “striking sense of economic commonality,” as evidenced by things such as the fall in the number of ‘billionaires’ in this era (versus the larger numbers in the Long Gilded Age and today). He claims that movement conservatism stands upon the shoulders of the wealthy and big corporations and is attempting to undo all of the ‘positive’ policies of the New Deal aimed at reducing inequality, such as the welfare state. Nonetheless, Krugman also believes that inequality in the Long Gilded Age, while similar to that of today, presented an even more difficult reality for the poor than it does today due to the fact that none of the government redistribution or insurance policies had as yet been enacted.
3. The three main reasons the Populist Party could not win had to do with its inability to unite the different groups which supported its ideals. Although things such as disenfranchisement, voter fraud and inadequate finances played a role, more importantly there were things such as a division between rural and urban voters, which was exacerbated by the large percentage of immigrants living in the cities. There was also the division within the Party concerning the Prohibition, which played off of the existing separation between city-dwelling immigrants (who were against it) and rural farmers (who were for it). The last reason Krugman gives was the divide caused by color. For although attempts were made by men such as Tom Watson to bring together poor black and poor white men, appealing to the common interest of both parties, nonetheless, the Populist Party was never able to put together a platform supported by both sides (or of both sides of the other above-mentioned separations).
4. In Krugman’s account, the grounds for the Welfare state were laid by states that passed laws, often at the time repealed as unconstitutional, but which were nevertheless encouragement for similar action later on in many states prior to the New Deal and an example for the federal government, once it finally came under the leadership of FDR.

Politics of Inequality

2009-02-16T12:07:00.002-05:00

Krugman says that inequality and polarization have been rising since 1970. In his view, did rising economic inequality produce interest groups that caused increased political polarization? Or did political polarization produce policies that increased inequality? Explain.
According to Krugman, in what ways is the economy today more like the economy in the 1910s than like the economy in the 1950s?
Krugman identifies three main reasons for why the Populist Party could not win. Discuss them.
In Krugman’s account, did the Welfare State start (before the New Deal) in the US because of a desire by conservatives (such as Bismark in Germany) to protect the status quo against revolution? Or because of federal mandates, originated by liberals like Woodrow Wilson? Or because of unconstitutional actions by states and local governments?

Friedman on Government

2009-02-12T14:38:00.002-05:00

1. Friedman describes the three basic roles of government, comparing it to an umpire in a sports’ game, thus: “to provide a means whereby we can modify rules, to mediate differences among us on the meaning of the rules, and to enforce compliance with the rules on the part of those few who would otherwise not play the game.” The government must be there not to make the rules, but to allow the people under it to reach a consensus on what the rules should be (including the ability to change this consensus). It must also be there to help when differences of opinion arise concerning the agreed upon rules, and in some cases, it is necessary that the government be there to make sure that all are following these rules, especially the few who may attempt to make themselves an exception to them.
2. Pollution and general access roads both have ‘neighborhood effects’ (they affect people in such ways that make it difficult to either pay them back or charge them for). Collective action then becomes necessary because voluntary exchange in these cases is not practical, as too many people are involved, making it costly to arbitrate the exchange.
3. Perhaps an example of governmental policy not supported by Friedman’s ideas would be bans on gay marriage. According to Friedman, this would be a violation of the ability of individuals to freely enter into their own arrangements, and there is no limiting freedom which should prevent this (as in the case of murder, as he argues on page 26) and which would justify government intervention.

Friedman's freedom

2009-02-10T14:15:00.000-05:00

1. Friedman values freedom so highly because he sees it as fundamental to the advancement of the individuals making up a society. Only when there is no coercion (for he does not talk about freedom in an ethical sense, as regarding what choices a man should make, but only as having the ability to act with no outside compulsion) is man able to enter into voluntary co-operations with other men in order to better himself.
2. He believes that political freedom follows from economic freedom because the free market, not being in the hands of the state, provides a check to political power, which means that men will not be subjected to coercion. In the case of socialism, the lack of economic freedom means that no one man would be able to finance the furthering of any dissenting view from that of the centralized government, thereby abolishing freedom of opinion and expression, unlike in a free-market economy.
3. Friedman sees it as highly important that individuals are at liberty to enter or not enter into exchanges because in voluntary exchange both sides are benefited and each is able to best satisfy his needs without fear of coercion or interference, due to the competition among buyers and sellers.

Social Justice

2009-02-09T16:03:00.003-05:00

Where Justice is giving to each what is do to them, what they have a right to, Charity goes beyond Justice in terms of giving so that it is Charitable to give to each what is morally praiseworthy.

Hayek argues that Social Justice is a “mirage” because only actions can be just, therefore a society could not be just. Society is not something that can be just or unjust. Hayek does not goes as far as to say that the state does or does not always get things right, he says that anything beyond providing basic needs is an imposition on freedom. Hayek does though say that the state would probably get it wrong, and offers that “individual interacting freely will produce a ‘catallaxy’… The free market represents such a catallaxy.”

What Rawles calls the original position is an abstraction where he imagines people deprived of all knowledge choosing how they would want their society organized, it represents a position where everyone is equal in every way. “Behind a veil of ignorance” refers to ignorance of who you are in society. A person who lacks any particularization is still human in that he has a capacity to frame, revise and pursue their own conception of the good. Rawles believes that people will choose equality of basic liberties, and fairness. Rawles would be inclined to believe in “live and let live.”

I am not sure that we could really expect people to limit themselves for the sake of fairness and perfect equality. I don’t believe it would bother anyone to know that their neighbor couldn’t afford a Corvette, but I do believe it would bother anyone if they were restricted from ever attaining a Corvette. It would be a poor system, one that is based on limitations and based on the least capable. It is against human nature. Rawles, it appears, fails to acknowledge how much better off the poor are because the “elite” were able to innovate and had no limits.

For Nozick justice is about respecting people’s rights to self-ownership and the right to own property. Nozick rejects the idea that everything on earth should be treated as if everyone has equal claim to it, because that is fantasy, everyone does not have equal claim to all things. Nozick understands that the separateness of people makes it unjustified to take from one person to make others happy, since nobody has any claim over another man. Nozick argues that you are who you are and we are all different, that is just the way things neither just or unjust. Given that through voluntary exchange resources are distributed justly, to redistribute them would unjustly take from one to give to another, using that person as a means to the others end. Nozick is criticized because his theories rest on the idea that people have full property rights.

Deserving and entitled are different, you can be entitled to something but not deserving of it. It is difficult to disentangle the effects of talent and hard work, because the fruits can only be measured by outcome, not by input. Also, at what point are the outcomes due to talent rather than hard work? If we wanted to base distribution on desert, then it is essential to separate the effort into accountability factors. Compensating differentials exist because people deserve more money for riskier jobs.

It is difficult to say what role virtue plays in the conceptions of Justice. It would appear to me that a disciplined, virtuous person would be responsible and hard working, placing value on what is just.

Friedman on Government

2009-02-06T10:34:00.003-05:00

On page 25 Friedman lists (twice) the three basic roles of government, roles that the market cannot perform by itself. Explain them.
What do pollution and general-access roads have in common? Why does this make collective action (usually through the government) necessary?
Think of a governmental policy with which you agree (or a policy that you'd like the government to follow, but which the government does not yet follow) but which is not justified according to Friedman's principles. Explain why Friedman's principles do not justify it.

Friedman on Economic and Political Liberty

2009-02-06T10:30:00.003-05:00

Here's a new policy. From now on, when you post, answer these questions directly.

Why is freedom so important for Friedman? (not for you, but for him) What are the philosophical grounds on which he justifies his attachment to freedom as a top good?
In what ways does political freedom depend on economic freedom? Explain why he thinks that a socialist economy is incompatible with pluralism of opinion and expression.
Why is it so important that individuals be effectively free to enter or not enter into a particular exchange?

Nozick's Views on Equality?

2009-02-03T11:32:00.001-05:00

In the chapter on equality, Swift claims that Nozick is “an honorable exception to my claim that everybody endorses equality of opportunity.” While it is definitely true that Nozick has a very ‘each man for himself’ view on life, it seems a bit extreme to claim that nothing in his theories could be about a certain kind of equality of opportunity. For example, when talking about the legal ways for people to obtain property for themselves, he speaks of initial acquisition. One of the conditions of this initial acquisition is that unowned land can is up for grabs, “so long as nobody is made worse off by their doing so.” This seems to hint at a certain notion of equality of opportunity, for why specify anything about the people who may be negatively affected, if all that matters is the individual. It seems then, that perhaps it is difficult to completely ignore the issue of equality of opportunity on all levels.

All Men are Created Equal in Dignity

2009-02-02T21:29:00.003-05:00

When we say we believe in equality of opporunity, we mean that everyone should have as fair a chance at achieving their maximum potential as anyone else. For example, everyone who obtains a college degree has a better chance at being hired for a very good job. Therefore why not allow everyone the right to try and get into college. Hence college admissions consider all applications from people in all walks of life. Some get into tcollege, some do not; for many sympathetic people it seems unfair that only some get in. Thus they advocate lowering standards so that everyone may get into college. Yet that view begs certain questions: if colleges are institutions of higher learning, how can they not have higher standards to ensure a positive learning curve among their graduating students? If equality is fairness, how is it fair that mediocrity can be held on par with excellence at an institution of higher learning and must compete for a qualified job? The areas in which we want people to have equal chances appear to be those with the greatest influence on society: education and politics. Outside the Church we do not think it is bad to have hierarchy. Hierarchy is not about being superior/inferior, but about duty/responsibility. It exists in politics where we have government corporations, which answer to agenices within the government bureaucracy. In school there are teacher's assistants, who answer to teachers, who answer to principals. It's not that those under authority are inferior, but rather they have a charge of responsibility that is less than those who work above them. All within the hierarchy are equal in dignity, but not in ability or office. That is not prejudice, that is achieving maximum potential with the gifts that God entrusted to those individuals.

Equality Questions

2009-02-02T14:03:00.005-05:00

Ex Corde Ecclesiae, 34:

[the Catholic university] will be capable of searching for ways to make university education accessible to all those who are able to benefit from it, especially the poor or members of minority groups who customarily have been deprived of it.

When we say we believe in equality of opportunity, what do we mean? In what areas of life do we want people to have equal chances? What are we prepared to give up to ensure that kind of level playing-field?

Is Rawls’s maximin an egalitarian position?

Do we all agree “that we all should be treated as equals”? In what senses do we think that we should not be treated as equals? If we are to treat others as equals, does that have consequences for the distribution of outcomes? E.g., does the legal or political system treat people as equals? (check out the McCain-Feingold Act)

[Outside of the Church], do we think that hierarchy (superior/ inferior) is bad? In politics/school/work/family?

Spheres of inequality: unequal in this, equal in that. We care that people be equally treated in the law courts but not in the tennis courts. Does that make sense?

Was there equality of opportunity in the Pre-Civil War South?

Swift’s “right-liberal” or “minimal” view of equality of opportunity suggests “color-blind” policies … which should be monitored and enforced. But would a profit-maximizing employer deliberately not hire a competent person, just because he’s of the wrong race/religion/national origin, etc.?

Can you imagine a world in which being from the right social class is relevant (meaning that it actually matters for economic efficiency)? In the US, you often hear that “it’s not what you know, it’s who you know” that matters for getting a job, getting ahead, etc. Is that just? Is that economically efficient? Is that humane?

Do you think that coming from a poor family should affect your chances of getting into a good university? How does poverty limit college-going chances? What would we have to do (as a society) to counteract the effects of poverty?

Is Swift’s conventional (left-liberal) view about equality of outcome?

Should morally arbitrary factors influence what job I get? What factors are morally arbitrary? What makes them so? What kinds of factors am I morally responsible for? If I am not morally responsible for something that affects my income, is it moral for me to suffer/benefit from it? Should it limit my opportunities (or the opportunities of my children)?

Do you agree with Swift that Nozick’s position is not about equality of opportunity?

Do you agree that it would be good for GDP if poor, smart kids were helped into better schools? But would it be efficient? What factors would go into that consideration?

Does equality of opportunity for children require equality of outcome for their parents? Does equality of opportunity require redistribution? Person A has a lot of capacity for hard work, but no money. Person B also has a lot of capacity for hard work, and lots of money. Do they have equal opportunities?

Is it right to talk about inequality of income without bothering to talk about where the income comes from? Suppose that inequality of income served no useful purpose – would you be in favor of equality then? That is, is inequality some kind of necessary evil, or is income inequality an necessary – and good – consequence of differences in our natures? After all, Aristotle says “from the hour of their birth, some are marked out for subjection, others for rule.” (Politics, Book 1, ch. 5) Is all talk of redistribution purely envy of the strongest, smartest, fastest, and best looking?

If Bill Gates has so much money, doesn’t it follow that the rest of us have less because of his success? How, exactly, do the larger economic opportunities of the rich benefit us all? How is “trickle-down” supposed to work?

Suppose it’s true that it helps the poor to give hard-working, smart rich people more economic opportunities. But how does it help the poor to send lazy, dumb rich people to Ivy League schools? How does it enlarge the size of the pie?

Notice that the discussion on Health Care in page 112 is particularly relevant. Much of the policy discussion on health care during the 2008 election hinged on the fact that if the rich have more access to health care, more medical students will become plastic surgeons and fewer will become family doctors (the McCain camp made this argument to defend their pro-free-market proposal). This is one way in which inequality makes the people at the bottom of the scale worse off in terms of health.

John Paul II in Sollicitudo Rei Socialis, 42:

the option or love of preference for the poor. This is an option, or a special form of primacy in the exercise of Christian charity, to which the whole tradition of the Church bears witness. It affects the life of each Christian inasmuch as he or she seeks to imitate the life of Christ, but it applies equally to our social responsibilities and hence to our manner of living, and to the logical decisions to be made concerning the ownership and use of goods.
Today, furthermore, given the worldwide dimension which the social question has assumed, this love of preference for the poor, and the decisions which it inspires in us, cannot but embrace the immense multitudes of the hungry, the needy, the homeless, those without medical care and, above all, those without hope of a better future. It is impossible not to take account of the existence of these realities. To ignore them would mean becoming like the "rich man" who pretended not to know the beggar Lazarus lying at his gate (cf. Lk 16:19-31).

Christian positions on private property

2009-01-27T14:46:00.012-05:00

Equality before God does not mean that people will be identical in this world. Equality of opportunity does not mean equality of outcome. God still expects us to work, and will reward us with the fruits of our labors in this life. Our success in this world does not determine our salvation.

There is a difference between a moral obligation and a legal obligation to help people. Morally, we are obliged to help the poor. The government ought not enforce this obligation through taxes, especially considering the waste that occurs when government tries to do things, but since it does enforce this, we must pay our taxes. To do otherwise would place an unjust obligation on those who do pay their taxes.

Just because private property can be used for evil, doesn't mean that it is intrinsically evil. Private property, like money, or any other material object, is a tool. It can either be used for good or for evil. It can be used for evil if it is seen as a final end, rather than a means. If nobody is allowed to possess it, then there is no merit in choosing the good. If you wish to do good with your property, to feed the poor with it, then this is good. If you wish to give up all your property, because it interferes with your salvation, then this is good too. But if true freedom is the freedom to choose the good, then you do not have true freedom if you are compelled to do the good. Doing good because you have no other choice has no merit.

Liberty

2009-01-27T14:31:00.004-05:00

According to Adam Swift’s divisions regarding conceptions of freedom, some of Reagan's views would appear to fall under the heading of an autonomous idea of freedom, which is centered in political participation. This can be seen, for example, in his inaugural address, where he states “Our government has no power except that granted it by the people. It is time to check and reverse the growth of government, which shows signs of having grown beyond the consent of the governed.” The free-market economy, private property, and individual genius are also important in this viewpoint. While this does seem to fit with the conclusion that we reached last class, in that freedom requires the ability to choose, there can also be a tendency to overemphasize individual choices and forget about the universal aspect of creation. Thus, what seems to be needed is a realization that freedom is not the only (or even the highest, perhaps) virtue, and that a combination of respect for man’s innate rights, along with his ability to make individual choices (which, theoretically, should be guided by charity) would perhaps be better than going to the extreme of either trying to include all men in everything, or else excluding those without initiative, or else taking away the ability of men to use his freedom to make the right choice for himself. It seems that social justice must recognize that there must be a kind of balance between choice and helping man to fulfill his duties.

Pauline Liberty

2009-01-24T12:43:00.005-05:00

Saint Paul was a not a closet totalitarian. First of all, totalitarianism involves controlling not only every aspect of the life of a man, but also what thoughts exist within his mind. In totalitarian regimes there are such issues as criminal thoughts; to merely hold a way of thinking contrary to the established order is a crime against the state. In Romans 7, he is not advocating that type of regime; what he is relating is the conflict between good and evil within mankind. The soul aspires to do good and obey God, the flesh seeks to do it own will which is contrary to God's will. Hence verse 19: "For I do not do the good I want, but the evil I do not want is what I do."

What Saint Paul does do in relating this conflict in his letter to the Romans is vindicate the necessity of laws to limit evil. Evil is inherently oppressive, a man who indulges in it becomes a slave to it. A man who is unchaste becomes enslaved to lust, even to the point where he can no longer abide by natural law and seek the charms of a woman to satisfy his lusts; he eventually seeks the deeper perversions sodomy or pederasty to satisfy his carnal urges. A man who is not studious becomes enslaved to sloth; the knowledge he gains eventually withers and becomes useless as a tool for his own advancement. The slope can continue on many accounts; a reality must also be pointed out: no man is an island, he part of the mainland. Evil can never be confined to the privacy of his domicile, it will eventually be expressed in public. What that expression could be depends on the sin or perversion: it could be murder, rape, child molestation, and so on.. Hence it may be against his will, he may feel oppressed, but laws that force him to be free are for his greater benefit, whether he realizes that or not. Because a man's evil is limited he will be freer, and society will flourish because of the freedom he is required to live.

The Mirage of Social Justice

2009-01-24T12:08:00.002-05:00

Hayak thinks social justice is a mirage because he believes there is a misunderstanding as to what justice actually is when presenting the idea that society can be just or not. He says that justice is related to action, it is a result of an acting agent. Hence a person acts justly when just action is undertaken. Yet when discussing society, it cannot e described as an acting agent. The distributions of all the resources resulting from society interacting with itself in a market are unintended consequences. If there is inequality, it is the cumulative result of the various decisions of the individuals acting within society, and it is not the intended result by any individual agent: because they are all acting for their own best interest. Thus society is not an individual agent which is capable of conscious actions that are just or unjust.

His argument against governemnt policies is based upon the idea that the results within a society are due to the actions of every one within that society. No one act from an individual can influence the whole of society, it must be an orchestration of actions from a considerable number of individuals. The problem Hayak the state's goal of achieving social justice involves centralizing authority and making decisions upon issues where the principle of subsidiarity should take precedence. In particular is the distribution of goods; upon what criteria should they be allocated? Hayak asks if it is merit, then what counts as merit? Its Hayak's argument is that its not that governement always gets it wrong, its that government is too big to achieve its goal of social justice without becoming a tyranny in the process.

Liberty

2009-01-22T14:43:00.003-05:00

Our political philosopher, Swift, seems to be lacking in philosophical insight and training. When discussing any subject in political philosophy, it is certainly the case that one must get first things first.

For example -- when discussing liberty (or freedom), as a philosopher, Swift ought to be able to outline the concept of freedom first, before any application to politics is made. What is freedom simply? THEN what is freedom in our modern political sphere? Over and over again, Swift glosses over opportunities to define freedom, and ends up making a common modern mistake -- that of merely talking about a term instead of defining it.

The best reference to this ambiguity comes early in the reading for today. Swift is evaluating Berlin and MacCullum, and he is writing on effective vs. formal freedom. Toward the end of his evaluation, Swift makes the argument that a poor woman who doesn't have the money to get to the Bahamas for vacation ("holiday") is actually still restricted by law, not by a lack of means. He makes this case since the woman would be arrested if she tried to board a mode of paying transportation without a ticket. This is a stereotypical straw man -- woman wants to go to the Bahamas, woman has no (spare) money, woman tries to steal transportation, woman gets thrown in jail, therefore it's the law's fault. The flaw in Swift's logic is that it assumes that the only way to get to the Bahamas is by standard commercial means, and that the law is set up to stop poor people from going to the Bahamas. To blame the law for a lack of freedom in this case is to blame a judge for judging rightly, or justly.

Swift's concept of freedom is devoid of any concept of the good; as such, it shows a very poor philosophical grounding, and lends itself to much critisism.

Liberty

2009-01-22T12:58:00.028-05:00

Effective freedom is "having the power of capacity to act in a certain way", whereas formal freedom just means that nobody is stopping you from doing something. I may be legally free to buy myself a new car, but that doesn't mean that I have the money to do so.

True freedom is autonomy, or self-movement, rather than just doing what you want. If you just do whatever your subjective desires tell you to, you become a slave to your urges. You're like an animal, acting only on your wants and instincts. With autonomy, your inner self is in control of your actions, and you can be your own master.

Another distinction within freedom is whether freedom comes from political participation or if instead laws are simply “the rules that determine what the individual is and is not free to do.” This second conception is the more common, since people in general are more interested in pursuing their own lives than anything else.

Even if your property was not legitimately acquired by those you acquired it from, as long as you acquired it legitimately, and did not know of the previous wrongdoing, I believe that you do have the right to that property. In my opinion, formal freedom in general trumps effective freedom, because the effective cannot exist without the formal. In many cases, Swift seems to miss the point that formal and effective freedom need not be in opposition. If one maintains formal freedom, then effective freedom can be achieved by means other than government. If someone doesn't have the money to buy a new car, then it is not up to the government to give them the money taken from someone else. It is up to that person to either earn the money for the car, or failing that, have it freely given to them by someone else.

Where liberty comes from

2009-01-22T11:30:00.003-05:00

The question of liberty poses hard questions. Swift's representation, while attempting to look at all sides of the question, nonetheless seems lacking in certain areas as there was not really any look into where liberty results from. For liberty is not just about being able to do whatever one wants whether through lack of interference (formal freedom) or the enablement to do what was otherwise impossible (effective freedom); it is about being able to decide upon and make right choices and this is because freedom does not come before responsibility/duty but is rather resultant from it. Swift may call this a moralized view of liberty, because it does indeed bring morality into the question. This does not mean that all things can (or should) be legislated by the state, but it seems wrong to deny that there are certain absolute truths upon which laws should be made (i.e. laws against murder), which while they may seem to infringe upon liberty, are actually protecting the rights of men (such as life, etc.). This is not to say that morality can be enforced upon people, but if laws are not made which recognize that men have responsibilities which must be performed, then it seems like chaos would ensue, in which all are free to act however they see fit. Thus, it appears to be a two-way road, in a sense, in which the rights and duties of men limit both their own action and the action of the state.

2009-01-21T16:19:00.000-05:00

Liberty Questions

2009-01-21T15:47:00.005-05:00

What is the difference between "effective" and "formal" freedom? Are you free to go to law school if you can't afford it? Are you free to get health care for your grandparents if you can't afford it? A "free country," indeed. How can we have freedom without justice, without right?

Suppose that if in the name of effective freedom (e.g., health care for all), we curtail some formal freedoms (e.g., keeping my very high income and my plastic surgery). What if this slows economic growth, makes everyone poorer, and thus actually reduces effective freedoms later on? So if you care about effective freedom, you'd better care about formal freedom too. They actually go hand-in-hand, if you take the time to think long-term.

What if, on the other hand, universal health care produces a healthier and more productive population, creates more demand for your business, and generates lots of after-tax income for yourself a few decades from now? What if publicly-provided health care and education today makes the country so rich in the future, that we can abolish all (not just some) taxes? So if you care about formal freedom, you'd better care about effective freedom, if you take the time to think about people's need to eat in the short-term.

Was St. Paul a closet totalitarian? Romans 7, 19: "For the good that I would I do not: but the evil which I would not, that I do." If I know that you will be much happier if you are chaste, or studious, or athletic, or polite and courteous, or a non-smoker, or a devout Christian/Moslem/atheist, or tolerant and open-minded, or respectful of the environment, or able to read and write, does it make you freer to be forced to be free?

Can you be completely sure of your right to own your property? Perhaps the guy who sold you that car had stolen it. Perhaps one of your ancestors stole land from the Indians/French/Mexicans/previous settlers. Perhaps your boss wasn't completely forthright with his customers, so your wages are stolen money. So how can you say that you have a right to "your money" and to do whatever you want with it? And if you don't, wouldn't it be a good thing to restore some semblance of justice - to take from you and give to the poor?

But if I can't be completely sure of my right to hold my wealth, how can anyone else be sure of their right to take it from me? Perhaps I have a right to it, after all. Perhaps the poor person to whom it would be given doesn't have a right to it either. Since we can't know, shouldn't we be agnostic and "not give, not take"? Isn't it really comfortable for me to be that kind of agnostic?

Can property rights cannot be established with 100% certainty? This is Earth, after all, and we must learn to live with some uncertainty. If I acquired something in good faith, using my own efforts and my own talents (and I own myself, if I own anything), isn't that good enough? Then, don't I have an absolute right (ok, an "as good as absolute" right) to my property, and in taking it to "spread the wealth around" aren't you making me unfree? How can we have freedom without justice, without right?

An economy based on private property makes people greedy, materialistic, and selfish. "It is easier for a camel to go in through the eye of a needle than for a rich man to enter the Kingdom." So I am doing you a BIG, BIG favor by redistributing your wealth.

Commanding Heights

2009-01-20T13:42:00.003-05:00

The system whereby economic decisions are made is obviously instrumental to the economic realities which emerge. "The Commanding Heights" is the term used in reference to economic systems, the way that a national economy is organized. As outlined in the DVD, history is full of the debate surrounding the Commanding Heights -- how ought a nation, or state, or town, etc. to act with regards to allocation of scarce resources? What system is best for making economic decisions?

The modern relativist position of "whatever system you want to do is the best one for you" doesn't quite cut it: history shows us that some systems provide for the good of man better than others. So, that being said, which is best?

The socialist command economy struggles on several levels. Foremost, it places all of the economic decisions of the masses on the shoulders of a few, which has yet to produce an efficient system. Thus, in these economies, waste abounds. Waste of scarce resources is obviously not a good to be embraced, and it is the primary critique of the socialist command economy.

Capitalist economies do not struggle with waste (in strict theory) but with an altogether different problem: justice. In a pure capitalist economy, the market dictates economic decisions. Thus, if the market dictates that a portion of the population ought to be sold into slavery or killed, it ought to be done. This sort of action is obviously unacceptable, but could be the price to pay for the peak efficiency of a capitalist economy.

Most of the economic decisions made by nations today fall in line -- in part or in whole -- with one of these two systems. Each can be tempered or diluted with specific virtues so as to dull their sharp weaknesses, and that is what generally goes on in contemporary national economies.

Social Justice Questions

2009-01-20T13:15:00.002-05:00

For Swift, what is the difference between an obligation in charity and an obligation in justice?

Why does Hayek think social justice is a mirage? Is his argument against government redistribution policies that “governments always get it wrong”? Why is it more likely (in his opinion) that a free market arrangement will get it right?

What does the “original position” mean in Rawls’s system? What does the “veil of ignorance” mean? (Notice these are distinct concepts). In what sense is a person who lacks any particularizing distinctions still a human being? What is the most important thing that a person does know while behind the veil of ignorance? Why is this important? In your own life, would you consider it to be so important? In what sense are we equal? Are our differences just a matter of luck? So ignorance of the good is analogous to freedom? (compare this with Centesimus Annus, 41) What principles does Rawls think people will choose behind the veil of ignorance? Do you agree that they would? Why? Is Rawls’s theory based on self-interest, or on “live and let live”?

What is justice about, for Nozick? Why does the history of how goods were produced matter? (How would one respond to his objection to the “manna from heaven” view from the point of view of the universal destination of goods?) How is “the separateness of persons” important for Nozick? What are Nozick’s ways in which we can come to own the natural world? Does it make sense to you that there can be “initially un-owned” bits of property (e.g., an idea)? Does it seem just to you that, because I have better athletic ability than you, I get to command higher wages? Do you think that it is possible to rectify past injustices (e.g., the scars of chattel slavery)? How is redistributive taxation an example of “using people as means”? Is that wrong? How does the “the Wilt Chamberlain example” go? Why is it so important that we, indeed, have “full or absolute” right to a particular piece of property for the Wilt Chamberlain example to work? (Could a “less effective, but still effective,” version of the example work with less-than-absolute right to the particular piece of property?) If my talents or my parents’ social position is a matter of luck, why does it have moral worth (what does it mean to say “I own myself”)?

How is saying, “I deserve to have this” different from saying, “I am entitled to this”? Why is it difficult to disentangle the effects of choice (e.g., working harder) and the effects of talents? Why would we want to disentangle them? What are all the different ways in which we use “desert” (e.g., “compensating differentials,” “legitimate expectations,” etc.)? What justifies compensating differentials? If someone gives me something of value (e.g., enjoyment in watching him play golf), why is it not just for him to get more income?

What role does virtue (e.g., character-formation, improvement of personality) play in these different conceptions of justice?

Social Justice

2009-01-20T13:07:00.003-05:00

The reading for today on Social Justice was a valiant attempt to a) lay a coherent framework for defining and discussing this issue and b) present the main, underlying topics of contemporary politico-philosophical debate in this area. I call the attempt valiant but not successful, and this I do for the following reasons...

I consider the attempt valiant in as much as it tackles a tough subject: justice. Justice is a term that has been difficult to "pin down" or define. The father of Philosophy, Socrates (and hence Plato), offered several different definitions, and concluded on none of them. Swift's exposition of justice was brave, and thankfully he limited his attempt to a single form of justice -- "social." Swift's attempt to review the political philosophers predominant in discussion of this concept is a noble one; he deserves credit for crafting an account of social justice by navigating the most influential sources on the subject, and for showing how each of these sources relates (or fails to relate) to the others.

However, the attempt was not successful in as much as Swift failed to draw conclusions regarding Social Justice; his argument could be summarized by the following series of statements: "Rawls thinks that social justice is X. Hayek disagrees (and here's why). Nozick disagrees (and here's why). Popular opinion is an amalgamation the preceding." There is no argument, no active case being made for a right understanding of Social Justice. It is possible to try to abstract Swift's inclinations on the subject, but never does he make an attempt at an independent truth-statement on the heart of the subject.

Finally, the attempt was not successful in part because of Swift's writing. Due to his sentence structure, on more than one occasion I found myself confused as to whether I was receiving Swift's philosophical opinion or the opinion of one of the authors that he summarizes (i.e. Hayek, Nozick, etc.). Also, I found his diction wanting -- his diversion from the default use of masculine pronouns seems to be stretching, or trying to make a point instead of allowing pronoun use to be a simple, unnoticed element of basic writing. HOWEVER, I do recognize that this forum is an Economics forum and not a Literature review; but, as budding economists, poor writing ought to be noted and corrected (at least in ourselves).

Social Justice

2009-01-20T13:06:00.037-05:00

For Swift, an obligation in charity is something that is morally right to do, but not your necessary duty. An obligation of justice is something that it is your duty to do.

Hayek thinks that social justice is a mirage because "society" is not an agent, it is made up as a bunch of individuals. Since "society" does not act, then it cannot be just or unjust. He believes that distribution is a matter of individual liberty and works best when left up to individuals.

In Rawls's system, social justice is best found in the principles that people would decide as most fair to everyone if they did not know what position they occupied in society. Behind this veil of ignorance, people don't know either their talents or their conception of the good. Rawls's whole position is based on the assumption that people will act in the best interest of all of society, not just in their own self-interest and egotism.

For Nozick, justice is "about respecting people's right to self-ownership, and their their right to hold posterity, leaving them free to decide for themselves what they do with what is theirs." He argues that goods do not just appear. They are produced by the work of individual people.

The Wilt Chamberlain example says that if Wilt Chamberlain is a good enough basketball player that people are willing to pay extra money to see him play, then it is just for him to get the money. Resources are not distributed equally, since he has more money than anyone else, but everyone gave him their own property freely, so it is just.

The effects of choice and talents are circumstances are hard to distinguish because depend on your point of view, they are different. In the view of some, how hard someone works is a matter of choice, but their intelligence is a talent; to others, hard work might also be a talent. Their point of view might be that a person may not work hard, not because they choose not to, but because they were never taught the value of hard work.

Commanding Heights

2009-01-20T13:06:00.022-05:00

The essence of Commanding Heights is the intellectual clash between the ideas of Hayek and Keynes. Keynes believed that in order to ensure the economic success of a country and prosperity for its citizens, the economy of that country must be carefully planned by its government. Hayek, on the other hand, believed that this would be disastrous, and that the best success would be found in leaving the economy up to the open market. This documentary covered the implementation of Keynes and Hayek's ideas from the 1920's through the 1980's.

When governments control or dominate a national economy, they try to meticulously plan every outcome. This is done through fiscal and monetary policy, but also through nationalizing the "commanding heights" of the economy, in other words important industries such as railroads, coal, steel, health care, and more. One reason many socialist economies failed is that after nationalizing these industries, they became wildly inefficient. With no incentive to turn a profit, the nationalized industries let costs get out of control and gave little regard to the desire of the consumers. Prices did not reflect the actual value of goods, but rather a somewhat arbitrary value assigned by the government.

A capitalist system, without large nationalized industries, has the benefit of efficiency. When industries are under private control, they have every incentive to turn a profit. The only way to turn a profit is to keep costs low and consumers happy. By allowing prices to change according to the value of goods, consumers and producers both are able to get what they want. One downside of a capitalist system is the relative uncertainty. Since prices change, they cannot accurately be predicted far into the future. A government has to give up much of its control of the economy, and instead trust that the market will function properly and benefit everyone.

There is a relationship between open markets and political freedom. When a government controls prices and industries "for the good of the people" it is not a very large step from there to start controlling other aspects of people's lives "for their own good." This does not necessarily arise in every case, but it is certainly a common occurrence.

The Commanding Heights

2009-01-20T12:10:00.006-05:00

The difference between Hayek and Keynes, is more relevant than ever especially given the decisions that are going to be made during the new administration. What Commanding Heights presents is a historic debate, markets vs. government. When governments control or dominate a national economy they get bloated and less efficient, and eventually corruption comes into the picture, as history has shown. Many socialist economies fell because they literally failed to implement any system that could sustain the people, all the people. In a market based economy all problems take care of themselves, the drawback is that the problems eventually take care of themselves, problems which could potentially be solved through government intervention. With private interest and real incentives, market based economies can really provide much more for people than a government controlled economy, but problems can take a long to time work themsevles out. Political freedom gives people the right to control more aspects of their lives, that directly correlates with private business, property, land, etc. For a person to be free politically they must also be in a open market economy, there is no freedom in a government making your choices for you.

Social Justice

2009-01-20T11:37:00.002-05:00

The concept of ‘social justice,’ and it’s various conceptions, as put forth by men such as Hayek, Rawls and Nozick is complicated and in-depth. Hayek essentially seems to deny that there is such a thing as a just society, because according to him, society is not an active agent, whereas Rawls seems obsessively fixated on fairness (‘equality’ according to him)- almost, apparently, to the point of abolishing any objective good- and Nozick puts forth a more individualistic view, stressing the utmost importance of private property. However, all of these views sound extreme, for it seems that the men who make up a society could theoretically, through political action, work towards making sure each man was given what was due to him, not so much on a basis of making sure that all got the same amount or that all ended up with exactly equal amounts, but more on a basis of first recognizing basic human rights which must be acknowledged and protected for all and then rewarding each man according to the legitimate choices that he makes to better himself (with the government stepping in where private choice was unable to provide for basic human needs). In the end, this seems somewhat more in line with the half-way desert view put forth in the later part of the section…

Commanding Heights

2009-01-20T11:36:00.002-05:00

“Commanding Heights” raised interesting issues concerning the sway between government and market control of the economy across the globe in the 20th century. It showed that even countries such as the US experienced a transformation after the world wars towards Keynesian thought and then later, in Reagan’s time, back to theories along Hayek’s and Friedman’s line of thinking. In the end, it seemed to demonstrate that there are serious consequences that result from too much (or too rash) government intervention (or control) of the economy, ranging, for examples, from things such as the German hyperinflation (which was later corrected through market power when Erhard abolished price controls) to the Communist Russia under Stalin, with a lack of economic initiative and ensuing disaster. Of course, markets may not be the ultimate solution to all economic problems, for markets are only tools which relay limited (albeit vital) information from producers to consumers and they do not necessarily ensure that incentives are unselfish. In certain situations, too, it seems that the government may need to step in and aid in providing goods which individual economic initiative is not able to provide for. However, the issue between economic control, between Keynes and Hayek, remains an interesting one, especially in our country’s current economic downturn.

Bureaucracy and Entrepreneurship

2009-01-16T15:25:00.001-05:00

When governments control or dominate the national economy, there is a strong tendency for them to create a bureaucracy to handle the "commanding height" industries they control. Socialist economies failed due to corruption within those bureaucracies, such as strikes from powerful unions seeking greater gains from the government. The bureaucracies themselves were already large and inefficient due to numerous laws implemented to ensure equality in employment and successful outcomes. These caused an increase in unemployment and inflation. The benefits of a capitalist system is a greater economic freedom for producers to make their products without undue legal interference (which increases production costs due to various legal compliance fees). There is also greater financial and consumption freedom for consumers because producers can make more and charge less. Unfortunately that is not the case with all producers because not all of them are so equally successful in the face of competition, a key factor in a capitalistic economy. Therefore, some will be unemployed; yet there is always the possibility of an entrepreneurial opportunity, which is a redeeming aspect of competition. If political freedom means less government intrusion into the economy, then yes there is a relationship between open markets and political freedom. Fewer laws means less bureaucracy that economic processes must go through to achieve their end. That is not to say that no laws is the best way to go. But laws that are a hindrance, like wage and price controls that force other laws into legislation to cover the numerous loopholes for the sake of fairness and equality. Political freedom removes economic legal red tape which allows markets to open up and flourish according to whatever competition brings.

The Commanding Heights: The Battle of Ideas

2009-01-14T15:24:00.005-05:00

Here are some questions that might prod you to write a response to the Commanding Heights episode we watched in class (drawn from the CH website). If you need a summary of the movie, you can find it in that website too.

What happens when governments control or dominate a national economy?
Why did so many socialist economies fail?
What are the benefits and drawbacks of the capitalist economic system?
Is there a relationship between open markets and political freedom?

Clive Crook - A system overwhelmed by innovation

2008-10-25T12:47:00.004-04:00

In an interesting article in the Financial Times, Clive Crook mulls over the long-term prospects for the financial system and for regulation of the overall economy.

Sorting out the details of the response will be messy but the principles are now clear and policy is forming around them. First, address illiquidity in the market for mortgage-backed securities. Second, inject public capital on a huge scale, drawing in new private capital at the same time. Third, revive the inter-bank market with temporary guarantees. Fourth, especially in the US, step up efforts to slow mortgage foreclosures, to relieve the distress and stop house prices undershooting.

Financial Risk, Safe Bike Lanes

2008-10-20T13:40:00.002-04:00

Here's an interesting mix. Real Time Economics summarizes Fed Governor Kroszner's words encouraging the financial sector to take risk into account. At the same time, Streetsblog summarizes some research that indicates that increasing the availability of safe bike lanes increases the number of people who bike.

Perhaps it isn't so much that bankers don't take into account risk per se, but as a result of the structure of incentives we've built up. Perhaps, to make an analogy, there aren't very many safe bike routes.

We have either highly padded and regulated cars (the commercial banking sector). Many accidents occur not because of lack of regulation but perhaps because of an "excess" it, which encourages drivers to stop paying attention to risk (I have a huge amount of metal surrounding me, I can't feel the wind, I have a nice, cushy seat and a seat belt and air bags, etc.). Lots of car accidents aren't really terrible, but a few are.

The idea of increasing the awareness of risk in bank management by adding indicators and reports is like adding an extra gauge in one's car that indicates the level of risk at which one is driving. I bet most people might pay attention to it the first day or two, and then just go back to the old ways ... because the incentives haven't changed at all. I know driving 20 miles above the speed limit is pretty stupid. But I haven't died yet, and I'm in a hurry.

On the other hand, bikers (and motorbikers) are exposed to huge amounts of risk if they interact with cars. Those who ride end up being highly risk-taking (who'd ride a bike in his right mind?).

What we want is a more innovative financial system that is, at the same time, not a danger to our health. We also want the environmental, health, and aesthetic benefits of biking (and, sure, the added flexibility), without the risk. Indeed, biking is in itself safer (who has ever heard of anyone dying from a bike collision).

Making safe bike lanes available increases the likelihood that people will bike rather than drive because now it's no longer just the highly risk-taking who drive. A "safe bike lane" is one in which the car-bike interaction is minimal. My analogy would point to creating areas of the financial system that in themselves are completely unregulated but which have no interaction with the rest of the financial system and in which collisions aren't very damaging.

The analogous group might be financial institutions that offer checking accounts, savings accounts, and perhaps CDs, but no more on the liability side (nothing fancy, nothing with very much leverage at all, nor very much return -- very solid stuff for people who have very simple needs and little sophistication), and very simple, very plain-vanilla assets that everyone understands easily and that are directly connected to some tangible backing.

These institutions would have to have access to liquidity in case of localized widespread defaults or liquidity needs (perhaps through the discount window and a network of similar financial institutions across the country), perhaps also full FDIC backing, etc., but would not be allowed to interact with the more sophisticated sectors of the financial system.

Perhaps what all this is leading to is a return of Glass-Steagall.

Housing Markets that May be Ready for a Turnaround

2008-10-20T13:34:00.002-04:00

According to this article, these cities may be ready for an improved housing market:

Philadelphia
Raleigh
Seattle
Des Moines
Birmingham
Salt Lake City
Denver

In October 2005, near the peak of the boom, the median sales price for a U.S. home reached 7.3 times per capita income; by this May it had fallen to 5.7, in line with historical norms. Nationally, the rate of decline in sales is slowing, and in some regions sales numbers have actually perked up. "The indicators are starting to look better," says Adam York, an economic analyst with Wachovia.
Why the disconnect? For starters, the national sales figures that get so much attention -- and remain depressing -- are brought down by boom-and-bust markets like Las Vegas, Miami and Phoenix. David Berson, chief economist with mortgage insurance firm The PMI Group, says that if hard-hit states like California, Arizona, Nevada and Florida are taken out of the statistical mix, the picture is much more promising.

Post Binge World

2008-10-20T09:39:00.002-04:00

Post Binge World
http://www.nytimes.com/2008/10/12/opinion/12friedman.html?_r=1&ref=opinion&oref=slogin

Economic crisis Web site BaselineScenario.com
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/10/AR2008101002441_pf.html

http://www.newsweek.com/id/163449/page/1
The financial industry itself is likely to shrink, and that's not a bad thing, either. It has ballooned dramatically in size. Curry points out that "30 percent of S&P 500 profits last year were earned by financial firms, and U.S. consumers were spending $800 billion more than they earned every year. As a result, most of our top math Ph.D.s were being pulled into nonproductive financial engineering instead of biotech research and fuel technology. Capital expenditures went into retail construction instead of critical infrastructure." The crisis will stop the misallocation of human and financial resources and redirect them in more-productive ways. If some of the smart people now on Wall Street end up building better models of energy usage and efficiency, that would be a net gain for the economy.

There Is No Reason to Panic

2008-10-10T17:01:00.000-04:00

Casey Mulligan in The New York Times
An Op-Ed piece by Casey Mulligan in the New York Times. He very clearly lays out economic arguments as to why things are just not that bad.
He concludes as follows:

So, if you are not employed by the financial industry (94 percent of you are
not), don’t worry. The current unemployment rate of 6.1 percent is not alarming,
and we should reconsider whether it is worth it to spend $700 billion to bring
it down to 5.9 percent.

Excellent discussion of likely Fed policy

2008-10-07T09:17:00.002-04:00

By Tim Duy, via the Economist's View

It is impossible to rule out a rate cut, and it seems like a cut should be the baseline case. Indeed, the case for a rate cut should be a slam dunk, expect for a.) rates are already low and b.) we haven’t seen a rate cut yet. ... The Fed may simply have already moved well beyond rate cuts in searching for solutions to the current crisis. And outright asset purchases is looking like that next move.

Paying interest on reserves (banks' deposits at the Fed) puts a floor on the Fed Funds rate. Suppose, as is the case, that the Fed flooded the market with liquidity (through the TAF, temporary auction facilities - which, now that there's an actual schedule, don't look too temporary). The increase in the supply of excess reserves should lower the Fed Funds rate, say from 2% to 1.5% But if the Fed keeps the interest rate to be paid on deposits at the Fed at, say, 2%, then those excess reserves will be borrowed at 1.5% and flow back into the Fed, as deposits, at 2% - this will keep going on until the Fed Funds rate returns to 2%.

So why do this? The problem of the TAF is that it provides liquidity a little too broadly. Not every institution that gets liquidity needs it equally badly. Suppose an institution that doesn't need liquidity gets it: since it didn't need it to pay its liabilities, and since keeping it as excess reserves earns income, the institution will "park" the excess reserves at the Fed, effectively "mopping up" the excess liquidity. Suppose an institution does need liquidity. It will use it to pay its depositors, suppliers, employees, creditors, etc., because its need for liquidity will exceed the interest on the Fed's deposits. So we get a happy situation in which the people that spend the Fed's cheap cash are the people who actually need it.

WSJ: Obama's Lead Widens in New WSJ/NBC Poll

2008-10-07T09:05:00.003-04:00

Presenting himself as a man of action, it seems, was not terribly attractive to independents

Independent voters are starting to swing behind Barack Obama and Joe Biden, who continue to benefit from economic turmoil and the public response to their debate performances, according to a new Wall Street Journal/NBC News poll. The survey gives the Democrats a six-point edge over John McCain and Sarah Palin, 49% to 43% with a margin of error of plus or minus 3.8 percentage points. That's up from a slim two-point advantage from the last Journal poll two weeks ago, and parallels other recent national polls.
The new poll is full of good news for the Democratic ticket. Obama increased his advantage over McCain when voters were asked which one they prefer to handle conomic issues, as a growing percentage of voters said that was their top concern heading into the election. More voters said they're "more reassured" by how Obama was responding to the financial crisis than by McCain.

Delenda Crisis Est

2008-10-07T09:00:00.002-04:00

From UBS:

+ There are three key conditions for resolving this crisis. First, bank balance sheets must be repaired. The private sector does not have the resources to do this. Governments must inject capital into banks. There is no alternative.

+ A piecemeal approach to recapitalising will not work. We need a system wide solution to a system wide problem. This will enable confidence in the system to be restored. There is no alternative.

+ Central banks must cut rates (Australia cut 100bp today). This will allow borrower balance sheets to be repaired, gradually. It will not boost growth (because there is no lending). It gives money to borrowers. There is no alternative.

+ Policy measures are anti-deflationary. They are not inflationary. There is no inflation threat in the OECD. Swift action is required to bring about stability to the financial system. Policy makers must listen to economists. There is no alternative.

UBS: Recession

2008-10-06T09:04:00.002-04:00

From Swiss economists
+ In the wake of ongoing financial turmoil and (so far) an ineffective policy response, UBS economists worldwide have revised down their outlook for 2009. We now see global growth at 2.2% yoy (previously 2.8%). The IMF brands 2.5% yoy a "recession".

+ The US is seen growing at 0.3%, Japan at 0.7%, the Euro area at 0.3% and the UK at -0.3%. Negative growth is very rare, and it takes a special effort to achieve it. The Fed, BoE and ECB are seen cutting rates significantly. The BoJ remains on hold (as there is less deleveraging in Japan).

+ Asia does not decouple. Weak exports will hit domestic demand as exporters cut back. Fiscal policy can offset but not change the direction (down). The idea that consumers in one of the poorest economies on the planet (China) can substitute for one of the richest (the US) is, of course, absurd.

+ Europe's summit of European leaders produced a half hearted desire for global cooperation. This was then immediately ignored by Germany who unilaterally guaranteed all bank deposits. The UK seems to be considering a Nordic style bank bail out. The approach is clearly fragmented.

Fed announces that it will begin to pay interest on depository institutions required and excess reserve balances

2008-10-06T09:03:00.002-04:00

Basically eliminates any limits on the amount of liquidity the Fed can inject
Board announces that it will begin to pay interest on depository institutions required and excess reserve balances.

What the Bailout Means for You

2008-10-04T12:00:00.001-04:00

http://biz.yahoo.com/usnews/081003/03_bailout_will_help_but_pitfalls_rem
ain.html?.&.pf=banking-budgeting

Less volatility, safe banks, milder recession, yet minimal tax relief
and mildly less scarce consumer credit

Reversal of Fortune: Politics & Power

2008-10-03T10:07:00.001-04:00

http://www.vanityfair.com/politics/features/2008/11/stiglitz200811

A long piece by Stiglitz in Vanity Fair: "Describing how ideology,
special-interest pressure, populist politics, and sheer incompetence
have left the U.S. economy on life support, the author puts forth a
clear, commonsense plan to reverse the Bush-era follies and regain
America's economic sanity."

Government's Role in the Mess

2008-10-03T10:01:00.001-04:00

http://cafehayek.typepad.com/hayek/2008/10/governments-rol.html

Russell Roberts' piece in the WSJ on government's role in the mess.