Thursday, February 25, 2010

Breaking Out of "Limited Morality"

Jesus smashes the boundaries of sympathy and love for our own community when he tells the story of the Good Samaritan and asks, "Which of these three do you think was a neighbor to the man who fell into the hands of the robber?" Because Jesus destroys boundaries with regularity ---the word parable (think parabala) is derived from the Greek Word "bolo" which means "curve ball", we may take for granted how each story is so exceptional and bursts with meaning. This question of who we view as our neighbor and worthy of our sympathy is of increasing interest to economists.

Beginning with the research of Nobel Prize winner Douglass North economists studied institutions (think of them as rules of the game, legal and/or social) and how they shape incentives to action. Because morality informs the institutions that seem desirable development economists have sought to grasp how morality develops and to whom we show our moral sentiments: cooperation, trust, sympathy, etc.. With all the failed attempts at developing countries you can see this research as seeking to understand what kinds of institutions like property rights, decision rules, etc. will stick in these different cultures.

Specifically, Guido Tabellini has been an important contemporary figure in this discussion and presents two kinds of morality: limited and generalized morality. Basically, limited morality is moral behavior that is acted upon within a strong kinship network but doesn't exist outside of that network. Generalized morality exists within and outside of the kinship network.

Our Economics and Moral Sentiments group discussed today how people apply morality differently to different settings (institutions). For example, someone acts one way in church but another way at the mall or sporting event. Different contexts yield different morality for the same individual. But, I couldn't help but thinking this is not the case for the mature Christian. In every environment they seek to hold fast to the teaching of Christ. Who is my neighbor? Not merely my family and friends. Who should I love? Everyone, even my enemies. Journeying with Christ requires my morality to be consistent, not changing upon every whim.

Perhaps this maturity comes not because Christianity (discipleship not conversion) is not a change merely in my ethical outlook but the acquisition of a new identity. The end goal of this new identity is expressed beautifully by Paul in Galatians 2:20. Admittedly, this is sometimes scary and other times just seems too difficult, but this is the kind of curve ball we should come to expect from a God who can love even us.

Thursday, February 18, 2010

The Role of "Cheap Caulk" in Providing Public Goods

Why do some of us conjecture that government is less efficient than the voluntary sector at helping people? How about the following report from ABC News and then Daniel Foster at So far, the federal government has paid $522 million in its home-weatherization ("cash for caulkers") program, and has actually weatherized either 9,100 or 22,000 homes, at a cost per home of between $24,000 and $56,000. Detailed data from one state (Texas) puts the cost there at $78,000 per house with only $4,255 due to materials and labor. All of the rest is the administrative costs in the system (even the $4,255 may be greater than what voluntary charities would have spent because of federal "prevailing wage" requirements).

Supporters of the federal program say that this is misleading because of most of the $522 million has been spent in start-up costs. But that's the whole point. For example, Federal bureaucrats had to spend months going county-by-county through the U.S. calculating what the "prevailing wage" for caulking really was, just so the program could begin. That's the waste. That's what a voluntary program would never have had to do.

I don't have the link, but a recent newspaper article here in Tallahassee suggested that a large chunk of the major savings for low income individuals was sometimes in just demonstrating that turning off lights or adjusting thermostats by even one or two degrees could make a serious difference in the monthly utility bill. And good caulk can be gotten for about $6.00 a tube.

Some people may argue that the real objective of the program isn't to help poor people, but rather to perform a macroeconomic stimulus function. But it appears that all of the rest of the country has just spent $525 million to stimulate the economy of the Washington D.C. metropolitan area, as if it needed any more stimulus.

Tuesday, February 16, 2010

"Modern" American Idols Part II: "Yea I Have a Goodly Heritage"

The quote from the opening title is from Psalm 16, the King James Version. It is also the inscription on a medal from the 1920s, which American families could receive by proving their genetic stock was appropriate for a "Fitter American Family" (if you follow the link, see Fitter Family Contests on the left index). The fascist-realism artwork of the "Fitter American Family" on the medal has to be seen to be believed.

It turns out that a government that is big enough and arrogant enough to tell a business what is "fair" competition or "fair" wages, big enough and arrogant enough to tell railroads where they can allow African Americans to sit, is also big enough and arrogant enough to tell Americans whether or not they will be allowed to retain what Monty Python has called "their naughty bits". Welcome to a part of American history that I had very little realization of until doing research for these posts: the Progressive-Era fascination with eugenics. Who was I to know that my grandparents might have been attending a state fair in Oklahoma trying to win one of those "fitter family" medals. (Clearly, given my height, eyesight, and tendency to bronchitis, giving them a medal would have been a mistake.) And who would have guessed that the social reformers of the Progressive Movement and Social-Gospel Protestantism were right in the thick of all of this.

Just a few months ago, the American Economics Association distributed a commemorative calendar for the 125th anniversary of the AEA. On the inside cover is a profile of Richard T. Ely, one of the founders of the AEA and a prominent economic Progressive and Social-Gospel Christian. You get a tenor of the origins of the AEA when the AEA calendar highlights his quote in the founding report:

"We hold that the doctrine of laissez-faire is unsafe in politics and unsound in morals, and that it suggests an inadequate explanation of the relations between the state and the citizens."

As we will see, the Progressives weren't kidding about not being laissez-faire in the realm of moral "relations between the state and the citizens".

Fast forward to 1995, and the Journal of Economic Perspectives, published by the same AEA, features the article "Eugenics and Economics in the Progressive Era," by Tim Leonard of Princeton University. He details the strong support the eugenics movement received in the Progressive branch of the economics profession, including several AEA Presidents. What I had never seen before was the connection between the Progressive push for minimum wage legislation and eugenic policies. Free-market economists opposed minimum wage legislation because of the reduction in employment it produced among low-skilled workers. According to Leonard (p. 213), Progressive economists supported the minimum wage precisely because it would lead to unemployment among the unskilled: "Columbia's Henry Rogers Seager, a leading progressive economist who served as president of the AEA in 1922, provides an example....'The operation of the minimum wage requirement would merely extend the definition of defectives to embrace all individuals, who even after having received special training, remain incapable of adequate self-support.' Seager (p.10) made clear what should happen to those who, even after remedial training, could not earn the legal minimum: 'If we are to maintain a race that is to be made up of capable, efficient and independent individuals and family groups we must courageously cut off lines of heredity that have been proved to be undesirable by isolation or sterilization....'"

I wonder why they didn't feature Seager's quote on the AEA calendar.

Also, because lobbying for the minimum wage has always been one of the hallmarks of Social Gospel Protestantism, this caused me to wonder what they felt about the eugenics connection. That's when I discovered a book published by Oxford University Press, Preaching Eugenics: Religious Leaders and the American Eugenics Movement by Christine Rosen (1994). Rosen argues that it was overwhelmingly the liberal, Social Gospel, "modernist" branch of Protestantism that participated in the eugenics movement, while opposition was largely concentrated in the conservative wings of Protestantism, Catholicism, and the Jewish Community. Perhaps the most bizarre event Rosen described was an organized "eugenics sermon contest" sponsored by the American Eugenics Society on Mother's Day (!) 1926 in which hundreds of Protestant ministers from virtually every mainline denomination competed. Rosen quotes what must have been a medal-winning sermon from Rev. Phillips Endecott Osgood [I'm not making that up], rector of the large St. Mark's Episcopal congregation in Minneapolis: " 'We see that the less fit members of society seem to breed and the right types are less prolific,' Osgood preached, but he emphasized that a practical solution to this problem was at hand. 'Taking human nature as it is and not ignoring any legitimate emotion or tendency, eugenics aspires to the refiner's work.'"

One liberal Protestant pastor who was on the Advisory Council of the American Eugenics Society (Rosen, p. 116) was Harry Emerson Fosdick, a "Northern" Baptist pastor active in Presbyterian pulpits and probably America's most outspoken advocate of turning Christianity from a religion of (what modernists would see as) "superstition" into a religion of "progress." Fosdick was also about to launch a civil war in the Presbyterian Church, a war which would eventually be won by the "Modernists," by his sermon "Shall The Fundamentalists Win?" which, I promise, will be the topic of Part III of this series on modernism and rationalism in the church.

Sunday, February 14, 2010

"Modern" American Idols Part I: Weird Presidents' Day

I’ve had scattered ideas about posts recently, but nothing gelled. However, I’ve found that numerous conversations, class discussions and so forth keep coming back to a common theme---the importance of understanding the radical shift in American culture, economics, and religious practice due to the overlapping forces of modernity, extreme rationalism, and Progressivism. The thing that finally got me motivated was thinking about President’s Day, and about one of our most complex Presidents, Woodrow Wilson.

Although Teddy Roosevelt served first, Wilson was the greatest example of American Progressivism, the “I’m from the government and I’m here to help you unwashed people” school of politics and economics. Wilson’s administration expanded the economic and political reach of the government through such things as the Federal Reserve System, the Federal Trade Commission, the Clayton Antitrust Act, the progressive income tax, and (unsuccessfully) The League of Nations. Wilson also presided over what arguably was the most racist post-Civil War administration in American history. Under Wilson’s administration, segregation and Jim Crow came to Washington, D.C. and to the Federal government. Just to give one example, Wilson’s second Treasury Secretary Carter Glass is quoted as saying, “Discrimination! Why that is exactly what we propose…to remove every negro voter who can be gotten rid of legally, without materially impairing the numerical strength of the white electorate.” Glass was also the architect of such Progressive touchstones as the Federal Reserve System (under Wilson) and the Glass-Steagell Act and the FDIC under FDR. In combining economic interventionism with racism, Glass was not an aberration in American Progressivism. If it surprises you that Progressivism and Jim Crow go hand in hand, read the works of historian J. Morgan Kousser or the review “When Bigots Become Reformers.” A government that is big enough and paternalistic enough to make it illegal for a firm to price “unfairly” is big enough and paternalistic enough to make it illegal for railroads to allow African Americans to sit in certain places on railroad cars.

Such a government is also big enough to do a lot of other things, and after campaigning for re-election on the platform that he had kept the U.S. out of the World War, Wilson joined America into the War with a totalitarian excess that we can scarecly imagine when we feel inconvenienced by taking our shoes off at the airport. The Wilson administration enacted a Sedition Act, it jailed political opponents, it nationalized huge swaths of private industry “for the war effort,” it shut down unfriendly newspapers, and it operated an official propaganda bureau that specialized in racist inflammations. I remember growing up in Oklahoma hearing older people telling me about having to hide German Bibles from their own government.

The disquieting thing for me to remember is Wilson's personal background. By calling, he was an academic and a college professor (in political science). He was also a devout Presbyterian, an Elder in the Church who read the Bible daily. But he represented not just any kind of Presbyterian. He was the Presbyterian who secularized Princeton University away from its roots in the Presbyterian Church and put it on the path to being a "modern" research institution. He typified the Social Gospel reformers who fervently believed that they carried the message of Jesus as a guide to practical economics and statecraft, but who in the end laid the groundwork for government to crowd out the community of Christ as primary conveyors of justice. To explore this paradox more, in the next part of this discussion I will turn to the fissures that, at about the same time as this paradox we know as Woodrow Wilson, were dividing the Presbyterian Church. This was the so-called Modernist-Fundamentalist split in the American church.