Morality and Markets

Doug and I just returned from the annual meetings of the Southern Economic Association. Doug presented our preliminary results on the "reverse crowding out" (see below) and we checked out several paper presentations relating to this blog. I'd like to elaborate on one idea here.

You've probably heard the story of individuals loading up their own single pick-up trucks with plywood and driving to areas affected by a hurricane. Such folks essentially open up shop on their tailgates, charging prices well above what they paid in their (inland) hometowns. I am confident that many Christian clergy find this practice un-Christian and support emergency measures to prevent "price gouging." As an economist and a Christian, I am happy to take the opposite opinion. As an economist, I can explain the objective consequences of price controls (fewer supplies will flow in; more rationing will be by line-standing and illegal markets) as well as the welfare and distributional consequences. As a Christian I have no problem finding these laws wanting (at the end of the day, they just as plausibly hurt as help the poor). [In a longer discussion, I would probably look at some of the moral attributes of different types of pricing or negotiating]. I believe that many if not most economists would agree with my analysis.

But let's expand the example a little. Suppose you have a Christian (even an economist) who loads up his or her pickup-truck and heads to the hurricane zone, but with the express purpose of driving to poorer neighborhoods and either giving away the plywood or selling it for the "inland" pre-hurricane price. From an economist's point of view, has this person been unwise or even unhelpful? I came away from one session believing that there are more economists than I realized who would answer "Yes" to that question, and I have problems with that. Their argument evaluates the specific outcomes themselves.... my hypothetical agent of grace distributed the plywood at other than the market clearing price. I can simultaneously oppose price controls and believe that it is not only acceptable but even praiseworthy to engage in the charitable actions I describe, because to me the essence of the free market is the realization of human freedom, including the freedom of an individual to give away plywood to poor people. But this is only a shadow of a full debate...there is a longer post here and I hope to get back to this in the near future.

Leviathan

Economists Hungerman and Gruber have a new article forthcoming estimating how much the New Deal “crowded out” similar spending on compassionate activities by American churches. This is consistent with an overall interest by economists and political scientists on why there was such an unprecedented ramp-up in the size of the federal government between World War I and World War II. The wars and the Great Depression are obvious proximate causes, but are we forgetting the role of Christians?

The period between The Civil War and World War I was that of what is sometimes called the “Third Great Awakening”. One of the economic manifestations of this great revival was the so-called “Social Gospel” which had enormous influence on the government-activist populist, progressive, and socialist political movements of the time. (The American Economic Association was a product of the Social Gospel movement). These movements had some direct influences during the so-called progressive era, but more importantly, when the New Deal required intellectual support for federal attempts to end the Great Depression, the Social Gospel – inspired movements had numerous big-government ideas already on the shelf (Social Security, being one example).

Now, Mark Noll of Notre Dame, in a new article in First Things , moves the action back several generations to the Second Great Awakening of the first part of the 19^th century. Paradoxically, the effect of this great religious revival was the decentralization and democratization of the institutions of American Christianity. However, the paramount social issue of the Second Great Awakening, abolition, led to the Civil War and the reconstruction Constitutional amendments -- all of which solidified and made unambiguous the notion of a strong, centralized federal government. Noll calls this the Second Founding Era. It is no surprise then that the next generation of Christians in the Social Gospel movement were so much more likely to turn to governments, including the federal government, for solutions.

Doug and I are working on a research project which asks the question: is reverse crowding out possible? Is the transition of compassionate activities to the government a reversible process, or is it simply the nature of the situation that government becomes “locked in” as the solution?

A Bagel With Your Laute ?

Doug and I were talking yesterday about gluttony, and whether a Christian lifestyle indicated something beyond just stuffing oneself. As I was running this morning, I was thinking about this and a bell went off in my head: Thomas Aquinas had something to say about this, didn’t he? Well, I checked Wikipedia under “gluttony” and found that indeed Thomas had made his opinions known on this topic. According to Wikipedia, Thomas identified five types of sinful gluttony:

• Praepropere - eating too soon
• Laute - eating too expensively
• Nimis - eating too much
• Ardenter - eating too eagerly
• Studiose - eating too daintily
  

You don’t have to be a scholastic philosopher to agree that this makes sense. I feel almost queasy when I got to an expensive restaurant and find that I’m paying enormous amounts of money for less food than is in a $4.99 frozen dinner, just so the meat and veggies can be arranged in a design matching, for example, a map of Napoleon’s retreat from Russia. That doesn’t fit the narrow definition of eating too much, but I would agree with Thomas that there something just not right there.

Oscar Elias Biscet

Jeff Jacoby writes in today’s Boston Globe about the horrific fate of Cuban Christian dissident Oscar Elias Biscet. President Bush will honor Dr. Biscet with the Presidential Medal of Freedom tomorrow. Unfortunately, given that Dr. Biscet is a prisoner in one of Castro’s squalid prisons for “disrespecting patriotic symbols” and speaking out against the regime, he will be unable to receive the prize in person. I had heard about Dr. Biscet, but I had not realized that his initial confrontation with the Castro regime was over the Cuban government’s abortion policy.

Is there anything that we can do? We should keep these brave, faithful believers in our prayers, and continue to make their plight part of our public conversation. Also, please read the Jacoby article [warning, it is explicit about the violence], and share a copy with anyone you know who wears a trendy “Che” t-shirt.

Mean Streets

Both the Wall Street Journal and the New York Times had articles on the same topic last week: the state of the Los Angeles effort to bring down violent crime among the homeless in the Skid Row area. Not surprisingly, the articles, although both quite factual, took different tones on the topic. The proximate reason for the post was that LA agreed not to appeal an lawsuit by the American Civil Liberties union which, as I understand it, undercut a key part of a year long campaign to reduce violent crime in Skid Row. (I’ll leave it to the reader to guess which article was written more from the point of view of the ACLU position, and which was written more from the point of view of LA cops on the street.)

These kinds of issues are perpetual paradoxes for Christians concerned about compassion for the poor. The LA program drew on other successful “broken window” programs in which the city prosecutes even low level crimes in a concerted effort to clean up an area. This makes sense from the economic point of view in that social systems can have undesirable equilibria that can not be knocked loose by small changes. In this case, the policy at issue was apparently the crime of pitching tents in the public rights of way on the sidewalk. If a program such as this seems heavy-handed but results in a decrease in crime (and here I mean specifically violent crime inflicted upon the homeless), is it compassionate or not? If, from a Biblical perspective, one could make arguments for or against, is it appropriate for Christians to support using the court system to intervene against the political process?