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22
Jun, 2017

How Statism Keeps Poor Countries Poor

 

Acton University Talk by Stephen L.S. Smith of Hope College.

STATISM is an economic system (also called State Capitalism) which allows a private sector but in which many key industries are owned/controlled by the government.

It lies somewhere between communism and European-style social democracy on the economic spectrum.

Smith says we need a “field guide” since most statism is invisible to the casual observer.
So he took us to THAILAND via a slide show.
  • Banks: Easy to use, modern banking all over the place.
  • You need to buy a SIM card for your phone from “AIS.”
  • Transportation (air and rail) is top notch.
  • You have to leave Thailand (flying to the US) at 4am (because of the time change/dateline), and you stay in a Novotel by the airport for a few hours of sleep first.
But in fact….
  • The bank I used (TMB), upon some research is the Thai Military Bank. The army runs it. At a loss. The Siam Commercial bank is owned by the ministry of finance.
  • AIS (SIM card) is subcontracted from the Thai government to the Singapore (!) government, which sells the chip to you.
  • Both the state owned railways and airlines (each) lose over $1 million a day. Many new airliners are mothballed (over capacity). Unused capital (see the new ghost cities of China) is typical in a statist system.
  • The Novotel is owned by the government and just operated by Novotel.
So what?
  • Statism is the default system in the Global South. There are exceptions, but this seems to be the rule.
  • It is almost invisible at the street level, but has major consequences.
  • The government not only issues currency, but controls the flow of it–limiting investment which would compete with state businesses.
  • Very little revenue is left over (because government firms lose so much money) to lend to medium and small businesses. This leads to a growing black market with lots of informal street vendors. They don’t pay taxes which compounds the cycle; with a downward drag on the society.
  • Common in statist societies is weak rule of law and questionable property rights.
  • Insiders and elites benefit, which opens up patronage politics.
  • The highly educated urbanites benefit from statism because of the need for them running these bureaucratic businesses, which put a premium on education and connections.
  • Neglect of core state functions (governments are limited in capacity and spend their time running industries) such as rule of law, civil justice, non-corrupt police, property rights, basic education, and rural infrastructure.
  • State banking skews prices and and natural interest levels. Interest rates are set at a below-market level, discouraging saving. Most people want to save short term and pay off loans long term (People want fast access to their savings). Setting interest rates at an artificially low level creates tension in this natural supply/demand situation.
  • Lending is directed to favored insiders with big projects.
  • Capital is wasted (ghost cities of China where no one lives) because natural market forces are not the primary driving force of construction. State-owned firms serve political ends first.

  • Developing countries have more frequent bank failures, even with the “security” of state ownership.
  • Some countries have it way worse than Thailand. Pakistan and Egypt may be the worst. The Petrobas scandal in Brazil brought down the government.

 

21
Jun, 2017

Hamilton and Jefferson–Beyond the Musical

 

No one can get tickets to the Hamilton musical, but we can get the book and learn how their relationship affects us…

Each was a colossus whose footsteps color our daily lives…

Lecture by John Pinheiro from Aquinas College given at #Acton2017.

 

We can look at Alexander Hamilton and Thomas Jefferson through two lenses:
  • Lived Experience. How their lives and upbringing affected their philosophy.
  • Philosophy and Principle. Whom they were reading and by whom they were influenced.
LIVED EXPERIENCE

JEFFERSON: Born into a planter aristocracy. Mother’s family (the Randolphs) were stratospherically rich and remained his main patrons throughout his career. Father was an educated aristocrat.

Jefferson had a solid classical education and even spoke 8 or 9 Native American languages. In 1775 he was one of the wealthiest men in America and had 200 slaves.

HAMILTON: Very broken home in the Caribbean. Worked hard as a clerk and got a scholarship to King’s (Columbia) in NYC. John Adams called him the “bastard brat.” Saw the bad side of people and slavery. Felt that we needed order and control to curb this.

PHILOSOPHY and INFLUENCERS

JEFFERSON: The French Enlightenment. People naturally good unless corrupted by commerce. Yeoman farmers are the key to freedom because they don’t have employers. Thus, have a small and weak central government and an agrarian paradise. Disperse the population westward. Emmerich de Vattel’s The Law of Nations influenced Jefferson–how sovereign states can participate in a union. Jefferson always used plural verbs and pronouns with “United States.” The Physiocrats (France) also influenced Jefferson. They stressed agriculture and coined the term “laissez-faire.” Land is the source of all wealth.

HAMILTON: The Scots Enlightenment. Especially Adam Smith. Looked not to France, but rather the British Empire. Always accused of being a royalist. Capital and division of labor, not land, are the source of wealth. Bernard Mandeville wrote the Fable of the Bees, which influenced Hamilton. Where do you look for a financial model? London! Protective tariffs. Centralized bank. Financed national debt a good thing. Hard work and ambition, not inheritance, is the path to power and wealth.

Conclusion

Jefferson and Hamilton continue to be the twin pillars of American social, political and economic thought. Jefferson’s party won most of the elections for the next couple of generations. His expansionist/agrarian vision led to the purchase of Louisiana. Enhanced by Jackson and Polk who steamrolled the country to the Pacific with “Manifest Destiny.” Homesteading and the checker boarding the Midwest USA are monuments to this thinking.

Hamilton won the economic battle however, with New York being a second London in terms of global finance, and the industrial north beat the agrarian south in the Civil War. Lincoln was a Hamiltonian and used his principles to further unite and solidify central authority.

Both believed that a virtuous society is necessary to maintain a republic.

 

21
Jun, 2017

How Far Does Religious Freedom Go?

 

According to the First Amendment, do we Americans have the right to freedom of worship? Or something more: freedom of conscience and freedom to ACT upon that conscience…..

Sam Gregg, Director of Research at the Acton Institute in Grand Rapids, kicked off the 2017 Acton University with a plenary talk about religious freedom and truth.

Some of his main points:

  • The agenda of secularists is to soften freedom of religion into “freedom of worship.” In other words, you can praise God behind closed doors of the church, but don’t bring this into public life. Full freedom of religion is:
    • Liberty to search for and teach the full truth
    • Liberty to act according to this truth
  • “Power corrupts and power point corrupts absolutely.” Thus, no power point. But hey, he only had one day notice as the main speaker was not able to be here because of weather delays.
  • Religion/Truth/Freedom is being replaced with Caesar/Lies/Slavery
  • “Progressive theologians who read way too much Karl Rahner….”
  • In 2016, 96,000 Christians were killed (!) for their faith. One every six minutes. We must remind people of this persecution, which for whatever reason is not covered by the mainstream media.
  • Secularists are trying to marginalize and stigmatize our teaching.
  • Why should we accept that happiness = hedonism? Why should we accept a dictatorship of relativism?
  • Be careful when you take government funds. It comes with a leash. Tell Pharaoh to keep his money.
  • We must always remember that there is such a thing as truth and religious liberty without a search for truth is not helpful. Religious freedom means liberty to search for the truth free of coercion from the government in any direction.
  • Without freedom from government in searching for truth, we cannot have free assent. Without free assent we cannot have true faith.
  • Martyrdom (not always deadly–sometimes just social) must become a real option again.

My thoughts:

  • Gregg seems to be good at playing a “Home Game.” I would be interested in hearing his “Away Game” when he’s not among like-minded people.
  • “Thomas Jefferson was not a Christian.” I beg to differ. Jefferson was the biggest proponent of Natural Law on earth at the time, and a great admirer of Aquinas. Of course, he was not a conservative Evangelical. but he insisted on grounding our natural rights in the “Creator” as he penned the Declaration. If you aren’t conflicted about Jefferson, you aren’t paying attention. Was he a Christian? Yes and no.
  • “Muslims, Jews and Christians have a different concept of God.” Yes and no. Sure their view of God is different but there is only one God; only one God of Abraham, and many Christians waffle on this monotheism. Not sure if Gregg is waffling or not. There’s only one mailbox with “God” on it. One Creator, one creation. False gods? How does that square with one God? Do the false gods exist? Sure, our VIEW of God varies. But I don’t believe that God is all that impressed with our constructs, which theologians tend to glorify.

 

6
Jun, 2017

Easy Fix for the Salton Sea

The Salton Sea is dying.

The result of an irrigation accident over 100 years ago, the Salton Sink (below sea level) started filling with water, and having no natural outlet, the water’s getting pretty stagnant, toxic, and just plain yucky.

But the fix is easy.
  1. Run a high-capacity aqueduct inbound from the Gulf of California which lies to the south. Control the flow level from a valve at the seashore. No need to pump–water runs downhill.
  2. Choose a water level for the Salton Sea and keep it there by varying the flow of the inbound water.
  3. Build a parallel siphon water pipeline going uphill to the Gulf of California. Thus, creating an outlet for the Salton Sea. Continuously pump water out into the world’s oceans.
  4. Over time, the salinity will match that of the Pacific Ocean. Over time, the outlet will dilute toxins and return the region to ecological health. If necessary, water leaving the Salton Sea for the Gulf of California could be treated at the Ocean shore before flowing out.
  5. Seafront property will be created, ready for development and recreation. Fish and birds will thrive once again.

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