Faith and the Free Market

I have faith, in things I can see and buy and deregulate. Capitalism is my religion.

- Jack Donaghy

The above quote is from the Emmy and Golden Globe Award-winning television series 30 Rock. The character, Jack Donaghy, is an extremely wealthy and powerful executive of the GE Corporation, and an avowed capitalist. The show portrays his free market beliefs as antithetical to faith and, even moreso, religion.  Here is part of a letter from Ayn Rand to Barry Goldwater, written in 1960:

The Communists claim that they are the champions of reason and science. If the Conservatives concede that claim and retreat into the realm of religion, it will be an act of intellectual abdication, the kind of intellectual surrender that the Communists’ irrational ideology could never have won on its own merits.

The conflict between Capitalism and Communism is a philosophical and moral conflict, which must be fought and won in men’s minds, in the realm of ideas; without that victory, no victory in the political realm is possible. But one cannot win men’s minds by telling them not to think; one cannot win an intellectual battle by renouncing the intellect; one cannot convince anybody by appealing to faith.

Capitalism is perishing by default. The historical cause of its destruction is the failure of its philosophical advocates to present a full, consistent case and to offer a moral justification for their stand. Yet reason is on the side of Capitalism; an irrefutable rational case can be, and must be, offered by its defenders. The philosophical default of the Conservatives will become final, if Capitalism—the one and only rational way of life—is reduced to the status of a mystic doctrine.

I am not suggesting that you should take a stand against religion. I am saying that Capitalism and religion are two separate issues, which should not be united into one “package deal” or one common cause. This does not mean that religious persons cannot crusade for Capitalism; but it does mean that nonreligious persons, like myself, cannot crusade for religion.

Granted, some of this letter is dated. Capitalism (a necessary component of freedom) is no longer at war with communism, per se. Individual rights now faces the much broader threat of collectivism. However, most of what Rand said still rings true today. The collectivists largely control academia, so they have been able to convince many that “progress” and “reason” are on their side. While conservatives (those mediocre champions of individual rights) frequently take up causes backed only by a subjective morality, or faith. For all the reasons stated in the letter above, this approach will lead to the victory of the collective over the individual.

It has been made clear by brilliant individuals (Milton Friedman, Ayn Rand, Adam Smith, F.A. Hayek) that free market capitalism is the political system that is consonant with man’s nature and the system that is supported by reason. But it is often asked whether or not a person of faith can also be a supporter of the free market. As both a Christian and an ardent proponent of capitalism, I believe that capitalism and faith are absolutely compatible. In fact, I would go so far as to say that free market capitalism is the only system compatible with the Christian religion. If one holds man to be created in the image of God, then it must follow that the individual is the highest object in the temporal realm. It is at this point that the atheist, agnostic, and deist alike come to the same conclusion: man is supreme on this earth. Any system of government must therefore be centered around man. As man’s nature is that of an individual and not as a collective, any system of government must be centered around the individual. As free market capitalism is the only political system built around individual rights, it is the only moral political system.

Let me be clear, I completely agree with Ayn Rand that capitalism can and should be argued by reason, not faith. However, many people of faith seem to believe that capitalism, because it requires at least a degree of selfishness, is incompatible with their religion. I would remind those readers that capitalism does not prohibit sacrifice in any way. The important point is that it does not enforce it. A collectivist society forces selflessness on its members, at which point sacrifice is no longer moral because it was not done by choice. Capitalism, on the other hand, leaves every individual free to pursue their own goals – allowing disparate beliefs to thrive without the violation of individual rights.

Side note: for anyone interested the American Enterprise Institute is holding an event on faith and capitalism called “Can Christians Be Capitalists?” on September 30th in Washington, D.C.

White House Wants Your Ideas on Tax Reform

According to the White House website:

President Obama has asked the President’s Economic Recovery Advisory Board (PERAB) to develop options for tax reform. The members of the tax subcommittee are preparing ideas to be considered by the board and would like to give anyone a chance to have input into the process on this important issue. Anyone wanting to share ideas and opinions for consideration by the subcommittee can do so here. The deadline for submissions is October 15th, 2009.

Note: The mandate to the PERAB is NOT to recommend a new tax system. They are to consider ideas on tax simplification, better enforcement of tax law, and reforming corporate taxes and to present the pros and cons of potential tax options. They were instructed not to consider options that involve raising taxes on families making less than $250,000 per year. So be mindful of their constraints when submitting ideas.

‘Natural’ Life Expectancy in the United States

The Political Calculations Blog writes that low life expectancy in the United States “is often pointed to as being the result of the deficiencies of the health care system in the U.S. The problem with this thinking however is that it does not account for the fact that the U.S. has a disproportionate number of individuals who die as the result of fatal injuries compared to the other wealthy nations of the world. This does not reflect upon the quality of health care in the U.S., in that these events almost universally occur independently of the condition of health of the individuals who die as a result of these factors.”

Robert L. Ohsfeldt and John E. Schneider, from the University of Iowa, reviewed life expectancy data from OECD member nations to statistically account for incidence of fatal injuries. The table below shows their findings:

After looking through the data, it becomes evident that without accounting for the incidence of fatal injuries, the United States ranks 14th of the 16 listed nations. But once fatal injuries are accounted for, US “natural” life expectancy from birth ranks first among OECD members.

World’s Worst Teenage Drunks

HT: The Daily Dish

New tip law ‘could cost jobs’

The BBC reports:

New rules on tipping waiting staff could cost restaurants £130 million and as many as 5,000 jobs, the hospitality industry association has claimed.

The new rules, which will make it illegal for tips to be used to make up staff wages, often to the national minimum, come into force on 1 October.

Restaurants will have to pay salaries in full, which will now attract national insurance on the whole amount.

The government has said restaurants will have to bear some extra expense.

But it estimates the amount will be nearer £60m, less than half the amount claimed by the BHA.

The British Hospitality Association (BHA) claims the cuts could mean one person per restaurant being out of work.

“One person’s job may not sound a lot. But potentially that’s quite a lot of jobs in these difficult circumstances,” said Bob Cotton of the BHA, referring to the recession.

Quote of the Day

“If you think health care is expensive now, wait until you see what it costs when it’s free.”

~ P. J. O’Rourke

Who Serves in the U.S. Military? The Demographics of Enlisted Troops and Officers

Post has changed location. Click here to read this post.

Is Happiness Infectious?

John Knight and Ramani Gunatilakal of the University of Oxford give their insight in a new study:

The paper uses an appropriate survey from rural China to answer the question: Is happiness infectious, i.e. does the happiness of an individual depend positively on the happiness of their reference group? The evidence is consistent with this hypothesis, but the challenge is to solve the ‘reflection problem’, i.e. is the apparent effect of neighbours’ happiness on own happiness a causal one or merely a reflection? A ‘quasi-panel’ approach is adopted, treating villages as groups and individuals as multiple observations within each group, and using an error components 2SLS estimator. The results suggest that a major part of the relationship is indeed causal: Adam Smith’s insight was correct! The normative and policy implications are briefly considered.

Click here to read the full report.

‘Status Quo We Can’t Believe In’

Cogan, Hubbard, and Kessler on the health “reform” plan:

According to provisions in both House and Senate bills, mandated plans must have low copayments and provide coverage of health-care services that is at least equal in scope to a typical, current employer-sponsored plan. But these are the very flaws that are responsible for high and rising health-care costs, flaws that stem directly from the misguided tax exclusion for and the extensive state regulation of health insurance. By locking in these flaws, the mandates will inhibit precisely the innovation needed to reform U.S. health care….Comprehensive, low-deductible, low-copayment insurance has brought us to where we are today. The administration’s plan to expand and lock-in this flawed paradigm will ultimately defeat the goal of making health services more affordable for everyone.

HT: Greg Mankiw

The 25 Most Dangerous Colleges in America

From the The Daily Beast:

[H]ow do America’s colleges stack up against each other, safety-wise? Specifically, which schools have the worst crime records? For that determination, The Daily Beast decided to look at the numbers. Specifically, for the past two decades, most colleges and universities nationwide have been required under the federal Clery Act—named for a Lehigh freshman raped and murdered in her dorm in 1986 before her parents discovered there’d been a slew of violent incidents at the university—to report annually to the U.S. Department of Education about crimes on and near campus, including murder, assault, sexual offenses and robberies.

The Daily Beast took the two most recent years of raw data from almost 9,000 schools and then further analyzed more than 4,000 (excluding two-year colleges, standalone graduate schools, etc.) over more than 50 different criteria, weighing different crimes against each other (murder carrying far more importance than, say, burglary), and factoring in incidents both on campus and nearby (since modern colleges, as everyone acknowledges, don’t stop strictly at the gates of the ivory towers). Local FBI data was also used to make the statistics as up-to-date as possible. (See full methodology below.) Schools were also judged on a students-per-capita basis so that large universities like Michigan State weren’t penalized when compared with small colleges like Amherst.

For a detailed description of the methodology, see here.

Here are the 25 most dangerous colleges in America:

1. Emerson (Boston, MA)
2. St. Xavier (Chicago, IL)
3. Maryland-Baltimore (Baltimore, MD)
4. Tufts (Medford, MA)
5. MIT (Cambridge, MA)
6. Maryland-Eastern Shore (Princess Anne, MD)
7. Grambling State (Grambling, LA)
8. South Carolina State (Orangeburg, SC)
9. Bowie State (Bowie MD)
10. North Carolina Central (Durham, NC)
11. Fitchburg State (Fitchburg, MA)
12. Illinois Institute of Technology (Chicago, IL)
13. Hampton (Hampton, VA)
14. Baltimore (Baltimore, MD)
15. Norfolk State (Norfolk, VA)
16. California State-Monterey Bay (Monterey Bay, CA)
17. Springfield (Springfield, MA)
18. Brown (Providence, RI)
19. Buffalo State (Buffalo, NY)
20. Harvard (Cambridge, MA)
21. Alabama A&M (Huntsville, AL)
22. New Jersey Institute of Technology (Newark, NJ)
23. Yale (New Haven, CT)
24. UC-Riverside (Riverside, CA)
25. College of Saint Rose (Albany, NY)

HT: TaxProf Blog