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In a recent Kaizen interview, Argentine entrepreneur Enrique Duhau discussed some of the challenges of doing business in a country with a politicized economy. I was reminded of Campante and Glaeser’s comparative study of Buenos Aires and Chicago, two cities that were very similar in the nineteenth century. They were similar in population size, with immigrants from all over, near great amounts of fertile land, and were important transportation hubs.
Yet, as Campante and Glaeser put it, “despite their initial similarities, Chicago was vastly more prosperous for most of the 20th century.” Why? Check out their paper at the NBER site: Filipe Campante, Edward L. Glaeser, “Yet Another Tale of Two Cities: Buenos Aires and Chicago”, NBER Working Paper No. 15104, Issued in June 2009.
The image is of the port of Buenos Aires, circa 1912. Click to enlarge.
* The two Americas: 13 countries’ GDP. Why are the North American countries spectacularly more prosperous than the Latin American countries? Why are Mexico, Brazil, and Argentina on average twice as wealthy as Venezuela, Cuba, and Peru? And why are the latter three nations on average twice as rich as Bolivia?
* On J. H. Elliott’s 2006 Empires of the Atlantic World: Britain and Spain in America 1492-1830 (Yale University Press). Elliott’s explanatory hypothesis: Spain’s empire in America was an “empire of conquest” while Britain’s was an “empire of commerce” (p. xv). Though Brazil was originally a Portuguese colony, so some additional connections need to be made.
* Argentina, Hong Kong, and the psychology of belief: Resource-poor Hong Kong’s relatively laissez-faire free market has taken it from poverty to riches. Resource-rich Argentina’s experiments in statism have taken it from prosperity to decline and semi-functionality.
* Crank economics and astrology in Bolivia: Ugghh.
Posted 1 day, 9 hours ago at 7:25 am. 1 comment
Following up on “European country data on the minimum wage,” here are the data for eighteen Western European countries in table form.
Or here is the Excel spreadsheet.
“List of sovereign states in Europe by minimum wage,” Wikipedia.
“List of countries by unemployment rate,” Wikipedia.
Both viewed 9 December 2013.
My video-lecture on the moral, economic, and political arguments for and against minimum wage laws.
Posted 4 days, 5 hours ago at 12:13 pm. 1 comment
An amusing quotation from William J. Bernstein’s Masters of the Word: How Media Shaped History.
Gutenberg (1395–1468) had invented an efficient way to mass produce moveable type, leading to larger quantities and lower costs for printed materials. Before Gutenberg, the Benedictines made good money from hand-copying materials and were able to exert some control over what reading materials were produced. So they were unhappy with the Gutenberg press and lobbied the authorities to control it.
In their petition to the authorities against the cheap printers, here’s their core argument:
“They shamelessly print, at negligible cost, material which may, alas, inflame impressionable youths, while a true writer dies of hunger [and] a young girl reads Ovid to learn sinfulness … . Writing indeed, which brings gold for us, should be respected and held to be nobler than all goods, unless she has suffered degradation in the brothel of the printing presses.”
There you have it. Cheap reading material in large quantities:
1. Exposes the youth to bad ideas.
2. Crowds out quality writers.
3. Debauches the morals of young women.
(4. And lowers our income!)
Just like that darned Internet with its crazies, bloggers, and porn.
William J. Bernstein, Masters of the Word: How Media Shaped History (Grove Press, 2013). I first heard the quotation on Russ Roberts’s EconTalk podcast with Bernstein (which is summarized here).
A good collection of answers to the question: How did the monks whose job was to copy books react to Gutenberg’s printing press?
Posted 5 days, 8 hours ago at 8:40 am. 5 comments
Should Christians be socialists? Some data points:
* Pope Francis delivered a strongly leftist apostolic exhortation, condemning free markets and endorsing some sort of paternalistic egalitarianism.
* C. S. Lewis argued in Mere Christianity that “a Christian society would be what we now call Leftist” — its economics would be socialist, no luxuries would be allowed, no advertising would be allowed, no charging interest on loans would be allowed, and so on.
So both the current most-well-known Catholic Christian and (probably) the most-well-known non-Catholic Christian of the past century endorse some sort of socialism.
* There is the long tradition of Christian institutions practicing what they preach — priests, monks, and nuns vowing poverty and typically living communally with no private property.
* And the long tradition of Christian spokesmen:
St. Basil: “The bread in your hoard belongs to the hungry; the cloak in your wardrobe belongs to the naked; the shoes you let rot belong to the barefoot; the money in your vaults belongs to the destitute.”
St. Ambrose: “You are not making a gift of your possessions to the poor person. You are handing over to him what is his.”
St. Gregory the Great: “When we furnish the destitute with any necessity we render them what is theirs, not bestow on them what is ours; we pay the debt of justice rather than perform the works of mercy.”
And many others along the way, connecting again to Pope Francis who quoted approvingly St. John Chrysostom: “Not to share one’s goods with the poor is to rob them and to deprive them of life. It is not our goods that we possess, but theirs.”
* But the most important arguments for Christians should come from Jesus himself, so there are the arguments from Scripture: Jesus’ throwing the moneylenders out of the temple (John 2:13-22), encouraging people to give away their possessions (Luke 18:22), telling the story of the rich man and the beggar Lazarus (Luke 16:19-25), claiming that one cannot love both God and money (Matthew 6:24), talking of camels and needles (Luke 18:25), and more.
So: Does Christianity entail socialism? (Please note that my question is not whether Christianity or socialism are true, but whether Christians should be socialists.)
 Pope Francis, “Apostolic Exhortation,” 2013.
 C. S. Lewis, Mere Christianity, Book 3, Chapter 3.
 Quoted in John Cort, Christian Socialism: An Informal History (New York: Orbis Books, 1988). (Thanks to Robert Hessen for sending this source to me.)
Immanuel Kant and “giving back.”
Posted 1 week, 5 days ago at 9:53 pm. 5 comments
In MP3 format or at YouTube, my review essay on Donald Frey’s America’s Economic Moralists: A History of Rival Ethics and Economics (SUNY Press, 2009).
The review was originally published in Business Ethics Quarterly in 2012. Subscribers to BEQ can access the text version here. The copyright agreement allows me to distribute a limited number of copies personally, so if you’d like a PDF of the review, email me at shicks [at] Rockford [dot] edu.
My conclusion: “America’s Economic Moralists is a good historical survey of mostly religious commentaries on economics. Frey’s work is in part a historical survey and in part a polemic against the autonomy individualists. In my judgment, Frey does a good job covering the important distinction between autonomy and relational economic moralities and many of the sub-debates therein. But there are more historically and philosophically significant themes that could also have been developed more fully, and Frey’s eagerness to advance the relational view and to slight the autonomy view sometimes gets the better of his skills as historian and philosopher.”
Cite: Hicks, Stephen R. C. 2012. “Review of Donald Frey’s America’s Economic Moralists: A History of Rival Ethics and Economics.” Business Ethics Quarterly 22.1, 186-193.
Posted 2 weeks ago at 8:02 am. Add a comment
Robert Lawson (Southern Methodist University), along with James Gwartney (Florida State University) and Joshua Hall (West Virginia University), is editor of the celebrated Economic Freedom of the World Index. The Index is one of the major achievements in social science research this generation, made possible by much better data and awesome computing power.
Professor Lawson spoke recently at Rockford University on the methodology, results, and policy implications of the Index. What country rates highest? How much has the USA declined in the last decade? Which countries are at the bottom of the list and why? Where do the BRIC countries (Brazil, Russia, India, China) stand? How does economic freedom correlate with democracy, human rights, and peaceful relations between nations? My follow-up 17-minute audio interview with him is here:
Or one can listen at YouTube.
Posted 1 month, 1 week ago at 8:53 am. 2 comments
A good journalistic piece in The New York Times: “The Perverse Effects of Rent Regulation.” (Thanks to R.M. for the link.)
Rent control is a classic case of bad economics and bad ethics. The bad economics is ignorance of unintended consequences — in this case a price control that makes the initial problem worse. The bad ethics is the altruism that motivates both ignoring the economics and using political compulsion — in this case the willingness to help relatively poorer tenants by sacrificing relatively richer landlords.
Here is Walter Block’s fine discussion of the economics and politics of rent control at the Concise Encyclopedia of Economics, and here is my full video lecture on Rent Control, part of my Business Ethics Cases series.
Posted 4 months, 2 weeks ago at 9:40 am. Add a comment
The Spanish translation of my essay is by Walter Jerusalinsky and published online at Idóneos e-magazine.
The essay was first published in English as “What Business Ethics Can Learn from Entrepreneurship” [pdf] in the Journal of Private Enterprise. It’s also available at the Social Science Research Network (where it was for awhile on SSRN’s “Top Ten” list of papers in the Entrepreneurship Research & Policy Network), in an e-book edition at Amazon, and in Serbo-Croatian [pdf] translation.
A PDF of the Spanish translation can also be downloaded here: “Lo que la Ética Empresarial Puede Aprender del Emprendimiento.”
Many thanks to Walter Jerusalinsky for his efforts.
Posted 5 months, 3 weeks ago at 1:10 pm. Add a comment