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The Tragic Triumph of the Welfare State over the Church

Posted by Tony Listi on December 29, 2008

church1By Will Herberg

ALONG with this overwhelming impact of the technological spirit on our culture, and therefore on our religion, we must take account of the effects of the Welfare State, of our Welfare Society, on religious attitudes in this country. Through the past century, the welfare services that ordinarily support human life in society have more and more passed over to the modern State, operating as a huge, centralized, bureaucratic, omnicompetent welfare agency. This has come as the culmination of the relentless secularization of life in the past four hundred years. In earlier days, through antiquity and the middle ages, into the sixteenth century, most of the welfare services that sustain life—taking care of orphans, jobless, old people, sick and incapacitated —were regularly rendered by family and friends within the scope and function of the Church, which was thus bound to the people by a thou- sand threads of everyday welfare interest. For the Amish people, this is still a reality today. In April 1965, wind and flood did wide damage in the midwest and destroyed many an Amish community. Groups of Amish people from the outside came to help their brothers rebuild their communities and their lives. On a TV news broadcast, a commentator noted: These days, when people are in trouble, there is one direction in which they look—to the federal government in Washington. But the Amish people don’t look to the federal government in Washington for help. They look to each other in their church.

That’s how it still is with the Amish people, but that’s how it was once all over in Christendom. I bring this forward not to encourage us to try to restore conditions long gone—that is a human impossibility—but to illustrate the profound changes that have taken place in recent centuries in our relation to religion and the Church.

With the deep and thoroughgoing secularization of Western society, the hopes and expectations of the masses of people have steadily been turning from Church to State, from religion to politics. This is a fact that no one, whatever his opinion or ideology, can deny, or has, in fact, denied. Consider how far this has gone in our own mass society, and our American society is only beginning to take its first steps in the direction of the Welfare State ; if you want to see a Welfare State in its full development, look at Sweden. But already in our own society people have been so stripped of their human bonds in Church and community that they are driven to look to the State for the most ordinary human associations and services. The State has not only become Big Father and Big Brother. It is actually brought to the point of having to supply to the forlorn members of the “lonely crowd” a State-appointed Good Friend. For, what is the modern social worker but a State- appointed Good Friend to the friendless denizens of mass society?

The modern State, in fact, becomes a divinized Welfare-Bringer. In the ancient world, the Hellenistic monarchs, and later the Roman emperors, prided themselves on being Welfare-Bringers (Euergetes, Benefactor), passing on the gifts of the gods to their subjects. They depicted themselves on their coins—the primary vehicle of State propaganda in those days which were without journalistic mass media, radio, or TV—as divinized figures holding a cornucopia, a horn of plenty, from which everything good is shown flowing to the grateful people. This is the modern Welfare State ; even some of the ancient symbols are being revived in cartoons and pictures. The omnicompetent Welfare State thus becomes the modern substitute for God and the Church, “from whom all blessings flow.”

Seen in this perspective, it is not difficult to understand why the Church as a religious institution has become more and more marginal in the everyday life of the people. The broad scope of its interests has become drastically narrowed by the galloping secularization of life. What does the Church do, what can it do, when the State takes over everything and comes to engage our deepest loyalties and emotions? Our religious feelings and religious interests have been more and more diverted from the attenuating Church to the expanding State. Is it any wonder that people are losing their interest in religion? They identify themselves religiously, belong to churches, and attend religious services, but for very different reasons (I have discussed this elsewhere) than once bound them to religion and the Church.

http://www.mmisi.org/ir/06_01_02/herberg.pdf

Posted in American Culture, Budget, Spending, and Taxes, Christianity and Politics, Economics, Government and Politics, Health Care, Intellectual History, Liberalism, Moral Philosophy, Political Philosophy, Politics and Religion, Poverty, Social Security, Socialism, Welfare State | Tagged: , , , , , , , , , , , , , , , , , | 3 Comments »

The Gospel According to Marx

Posted by Tony Listi on August 13, 2008

In the beginning was the Government, and the Government was with God, and the Government was God. All things came to be through Government, and without Government nothing comes to be.

Now Mary was with child, though she was not married to Joseph. And it came to pass during the reign of Herod that Jesus Christ was born out of wedlock in a Bethlehem stable (for Planned Parenthood had not been established yet).  Poor Mary and Joseph had sought shelter in many places, but the greedy Jewish innkeepers would not let them in. Three travelers from afar, from the distant national capital of Rome, came bearing gifts of universal health care, housing, and education.  And so they prospered as Jesus grew in enlightenment and diversity sensitivity.

As Jesus grew into a man, he saw so much suffering and poverty among his fellow human beings. He decided to become a community activist, the only way he would ever make a difference. And so one day as he was walking beside the River Jordan, he happened upon some fishermen. He began to talk to them about their wages and stir in them a zeal for economic justice. “Fishermen of Judea unite!” cried Jesus.

He befriended tax collectors and Roman officials as well and made them his disciples, for they were doing God’s work in resisting the bourgeoisie. “Let the proletariat with no purse, sell his cloak and buy a sword,” Jesus said. His ministry grew far and wide as he and his naked disciples went door-to-door demanding money from the wealthiest of Jews. Those who refused were threatened by the swords of Rome and easily surrendered their ill-gotten gain. And thus Jesus went throughout the land performing all manner of miracles, redistributing wealth to the poorest of people. The multiplication of wealth continued until 12 baskets full of coins were left over.

Jesus gathered the people around him and began to preach: “Blessed are the poor, for they deserve to be the kings of the earth. Blessed are those who cry, for government will comfort them. Blessed are the meek, for no one should be stronger or better than anyone else. Blessed are the peacemakers, for war is evil and should be outlawed.” The peace of Christ reigned throughout the land.

He then told them a parable. “The master gave five talents to three servants – to each according to their need. When the master returned days later, he found inequality among his servants. One had made another five talents. One had managed to hold onto his five. One had squandered his five in dissolution. So the master took five from the servant with ten to give to the one who had none. For to everyone who has more, more will be taken away. To he who has little, he shall receive in abundance.”

Now the religious establishment in the region, the Pharisees, was not happy about the revolution Jesus had been leading. They were cold-hearted and increased their power and wealth through the lies they told to the poor about morality and an afterlife.  So this group of bigoted, reactionary, hypocritical religious fanatics plotted to destroy Jesus.

But Jesus was intelligent and sophisticated. A certain disciple of his, Nicodemus, had infiltrated the Pharisees and informed him of their treachery. And in the dark of night, the disciples of Jesus raided the homes of the Pharisees and dragged them and their families onto barges from which they were sent down river to re-education camps in the desert.

With the land cleansed of all iniquity, Jesus performed one last wondrous deed. He gave all his followers eternal life on this earth through the power of science.

And so Jesus was elected emperor of the world forever and ever. Amen.

Posted in Budget, Spending, and Taxes, Christianity and Politics, Economics, Government and Politics, Just for Fun, Liberalism, Political Philosophy, Politics and Religion, Poverty, Socialism, Written by Me | Tagged: , , , , , , , , , , | Leave a Comment »

Who is More Compassionate: Conservatives or Liberals?

Posted by Tony Listi on May 15, 2008

http://www.arthurbrooks.net/whoreallycares/excerpt.html

“The conventional wisdom runs like this: Liberals are charitable because they advocate government redistribution of money in the name of social justice; conservatives are uncharitable because they oppose these policies. But note the sleight of hand: Government spending, according to this logic, is a form of charity.

Let us be clear: Government spending is not charity. It is not a voluntary sacrifice by individuals. No matter how beneficial or humane it might be, no matter how necessary it is for providing public services, it is still the obligatory redistribution of tax revenues. Because government spending is not charity, sanctimonious yard signs do not prove that the bearers are charitable or that their opponents are selfish. (On the contrary, a public attack on the integrity of those who don’t share my beliefs might more legitimately constitute evidence that I am the uncharitable one.)

To evaluate accurately the charity difference between liberals and conservatives, we must consider private, voluntary charity. How do liberals and conservatives compare in their private giving and volunteering? Beyond strident slogans and sarcastic political caricatures, what, exactly, do the data tell us?

The data tell us that the conventional wisdom is dead wrong. In most ways, political conservatives are not personally less charitable than political liberals—they are more so.

First, we must define “liberals” and “conservatives.” Most surveys ask people not just about their political party affiliation but also about their ideology. In general, about 10 percent of the population classify themselves as “very conservative”; and another 10 percent call themselves “very liberal.” About 20 percent say they are simply “liberal,” and 30 percent or so say they are “conservative.” The remaining 30 percent call themselves “moderates” or “centrists.” In this discussion, by “liberals” I mean the approximately 30 percent in the two most liberal categories, and by conservatives I mean the 40 percent or so in the two most con­servative categories.

So how do liberals and conservatives compare in their charity? When it comes to giving or not giving, conservatives and liberals look a lot alike. Conservative people are a percentage point or two more likely to give money each year than liberal people, but a percentage point or so less likely to volunteer.

But this similarity fades away when we consider average dollar amounts donated. In 2000, households headed by a conservative gave, on average, 30 percent more money to charity than households headed by a liberal ($1,600 to $1,227). This discrepancy is not simply an artifact of income differences; on the contrary, liberal families earned an average of 6 percent more per year than conservative families, and conservative families gave more than liberal families within every income class, from poor to middle class to rich.

If we look at party affiliation instead of ideology, the story remains largely the same. For example, registered Republicans were seven points more likely to give at least once in 2002 than registered Democrats (90 to 83 percent).

The differences go beyond money and time. Take blood donations, for example. In 2002, conservative Americans were more likely to donate blood each year, and did so more often, than liberals. If liberals and moderates gave blood at the same rate as conservatives, the blood supply in the United States would jump by about 45 percent.

The political stereotypes break down even further when we consider age: “Anyone who is not a socialist before age thirty has no heart, but anyone who is still a socialist after thirty has no head,” goes the old saying. And so we imagine crusty right-wing grandfathers socking their money away in trust funds while their liberal grandchildren work in soup kitchens and save the whales. But young liberals—perhaps the most vocally dissatisfied political constituency in America today—are one of the least generous demographic groups out there. In 2004, self-described liberals younger than thirty belonged to one-third fewer organizations in their communities than young conservatives. In 2002, they were 12 percent less likely to give money to charities, and one-third less likely to give blood. Liberal young Americans in 2004 were also significantly less likely than the young conservatives to express a willingness to sacrifice for their loved ones: A lower percentage said they would prefer to suffer than let a loved one suffer, that they are not happy unless the loved one is happy, or that they would sacrifice their own wishes for those they love.

The compassion of American conservatives becomes even clearer when we compare the results from the 2004 U.S. presidential election to data on how states address charity. Using Internal Revenue Service data on the percentage of household income given away in each state, we can see that the red states are more charitable than the blue states. For instance, of the twenty-five states that donated a portion of household income above the national average, twenty-four gave a majority of their popular votes to George W. Bush for president; only one gave the election to John F. Kerry. Of the twenty-five states below the national giving average, seventeen went for Kerry, but just seven for Bush. In other words, the electoral map and the charity map are remarkably similar.

These results are not an artifact of close elections in key states. The average percentage of household income donated to charity in each state tracked closely with the percentage of the popular vote it gave to Mr. Bush. Among the states in which 60 percent or more voted for Bush, the average portion of income donated to charity was 3.5 percent. For states giving Mr. Bush less than 40 percent of the vote, the average was 1.9 percent. The average amount given per household from the five states combined that gave Mr. Bush the highest vote percentages in 2003 was 25 percent more than that donated by the average household in the five northeastern states that gave Bush his lowest vote percentages; and the households in these liberal-leaning states earned, on average, 38 percent more than those in the five conservative states.

People living in conservative states volunteer more than people in liberal states. In 2003, the residents of the top five “Bush states” were 51 percent more likely to volunteer than those of the bottom five, and they volunteered an average of 12 percent more total hours each year. Residents of these Republican-leaning states volunteered more than twice as much for religious organizations, but also far more for secular causes. For example, they were more than twice as likely to volunteer to help the poor.

Surely Jimmy Carter would have been surprised to learn that the selfish Americans he criticized so vociferously were most likely the very people who elected him president.

© Basic Books – 2007″

The Statistics

http://www.arthurbrooks.net/whoreallycares/statistics.html

People who are religious give more across the board to all causes than their non-religious counterparts

There is a huge “charity gap” that follows religion: On average, religious people are far more generous than secularists with their time and money. This is not just because of giving to churches—religious people are more generous than secularists towards explicitly non-religious charities as well. They are also more generous in informal ways, such as giving money to family members, and behaving honestly.


Giving supports economic growth and actually creates prosperity

Many studies show that giving and volunteering improve physical health and happiness, and lead to better citizenship. In other words, we need to give for our own good. Cultural and political influences—and the many government policies—that discourage private charitable behavior have negative effects that are far more widespread than people usually realize.


The working poor in America give more to charity than the middle class

The American working poor are, relative to their income, some of the most generous people in America today. The nonworking poor, however—those on public assistance instead of earning low wages—give at lower levels than any other group. In other words, poverty does not discourage charity in America, but welfare does.


Upper level income people often give less than the working poor

Among Americans with above-average incomes who do not give charitably, a majority say that they ‘don’t have enough money.’ Meanwhile, the working poor in America give a larger percentage of their incomes to charity than any other income group, including the middle class and rich.


Plus
:

People who give money charitably are 43 percent more likely to say they are “very happy” than nongivers and 25 percent more likely than nongivers to say their health is excellent or very good.
A religious person is 57% more likely than a secularist to help a homeless person.
Conservative households in America donate 30% more money to charity each year than liberal households.
If liberals gave blood like conservatives do, the blood supply in the U.S. would jump by about 45%.

Posted in American Culture, Budget, Spending, and Taxes, Christianity and Politics, Economics, Government and Politics, Liberalism, Moral Philosophy, Political Philosophy, Politics and Religion, Poverty, Socialism | Tagged: , , , , , , , , , , , , , , , , , , , , , , , | 16 Comments »

“What causes poverty?” is the Wrong Question!

Posted by Tony Listi on April 10, 2008

Watch http://www.isi.org/lectures/lectures.aspx?SBy=search&SSub=title&SFor=poverty

“What causes poverty?” is the wrong question! The real, more useful question we should be asking ourselves is “What causes wealth?” If half the world lives on less than $2 a day, we should naturally ask “What happened to the other half?” From these better questions, we can seek solutions rather than people to blame.

The question “What causes poverty?” seems to imply that wealth is the status quo and poverty is somehow a deviation from that norm. But even a cursory look at history shows this to be a ridiculous premise. History is not the story of how some people become poor but how some people escaped from poverty, the real human norm, and thus became wealthy. I think this a crucial difference of paradigm between the liberal/socialist/communist/Marxist perspective and the conservative/libertarian perspective.

So what causes wealth? Capitalism; free, competitive, and international markets. But that is not all and maybe not even the most important element. Capitalism cannot exist without certain supporting institutions (governmental, financial, social, religious, etc.) and cultural norms that have developed in the West.

Posted in Africa, American Culture, Economics, Foreign Aid, Free Trade, Government and Politics, Liberalism, Moral Philosophy, Political Philosophy, Poverty, Socialism, Written by Me | Tagged: , , , , , , , , , | Leave a Comment »

Industrial Revolution Was Good for Common Worker

Posted by Tony Listi on March 31, 2008

http://www.econlib.org/Library/Enc/IndustrialRevolutionandtheStandardofLiving.html

Industrial Revolution and the Standard of Living
By Clark Nardinelli

Between 1760 and 1860, technological progress, education, and an increasing capital stock transformed England into the workshop of the world. The industrial revolution, as the transformation came to be called, caused a sustained rise in real income per person in England and, as its effects spread, the rest of the Western world. Historians agree that the industrial revolution was one of the most important events in history, marking the rapid transition to the modern age, but they disagree vehemently about various aspects of the event. Of all the disagreements, the oldest one is over how the industrial revolution affected ordinary people, usually called the working classes. One group, the pessimists, argues that the living standards of ordinary people fell. Another group, the optimists, believes that living standards rose.

The debate over living standards is important because it represents a place where the critics and defenders of capitalism meet head-on. It is no coincidence that the debate heated up during the Cold War. The pessimists wanted to show that the English industrial revolution, which took place within a capitalist economy, necessarily made working people worse off. Optimists defended capitalism by showing that the industrial revolution made everyone better off.

This disagreement over the standard of living is confined almost entirely to academicians. Most other people, if they think about it at all, consider it well established that the industrial revolution was a disaster for the working classes. Indeed, the ghastly images of Dickens’s Coketown or Blake’s “dark, satanic mills” dominate popular perceptions of what life was like during the early years of English industrialization. Economic historians, however, have gone beyond popular perceptions to try to find out what really happened to ordinary people.

First, we must consider what “standard of living” means. Economic historians would like it to mean happiness. But the impossibility of measuring happiness forces them to equate the standard of living with real income. Real income is money income adjusted for the cost of living and for the effects of things such as health, unemployment, pollution, the condition of women and children, urban crowding, and amount of leisure time.

Because a rise in real income was precisely what made England’s transformation “revolutionary,” it would seem that, by definition, the industrial revolution led to a rise in the standard of living. According to the estimates of economist N. F. R. Crafts, British income per person (in 1970 U.S. dollars) rose from $333 in 1700 to $399 in 1760, to $427 in 1800, to $498 in 1830, and then jumped to $804 in 1860. (For many centuries before the industrial revolution, in contrast, periods of falling income offset periods of rising income.) Both sides in the debate accept Crafts’s estimates. But if the distribution of income became more unequal and if pollution, unemployment, and crowding increased, the real incomes of ordinary people could have fallen despite the rise in average income.

If significant economic growth is sustained over a century or so, the only way the poor become worse off is if inequality increases dramatically. Crafts’s estimates indicate that real income per person doubled between 1760 and 1860. Therefore, the share of income going to the lowest 65 percent of the population would have had to fall by half for them to be worse off after all that growth. It didn’t. In 1760 the lowest 65 percent received about 29 percent of total income in Britain; in 1860 they got about 25 percent. So the lowest 65 percent were substantially better off. Their average real income had increased by over 70 percent.

This evidence means that the optimists have won the debate on the big issue of whether the industrial revolution helped or hurt ordinary people. It helped. But smaller debates remain. Did the working class become worse off during the early years of England’s industrialization, 1790 to 1840, when real income per person grew at only about 0.3 percent per year? Growth at such a slow rate made a deterioration in the lot of the working classes possible. A simple numerical illustration will show why. If we take 0.3 percent per year as the annual rate of growth of real income, average real income in 1840 would have been about 16 percent higher than in 1790. The share of total income going to the lowest 65 percent of the income distribution need only have fallen to 86 percent of its 1790 level to negate the benefit of rising average income. Although they do not agree on how much, most economic historians agree that the distribution of income became more unequal between 1790 and 1840. Moreover, if we add the effects of unemployment, pollution, urban crowding, child labor, and other social ills, the modest rise in average income could well have been accompanied by a fall in the standard of living of the working classes.

The modern debate over this issue, which began with a 1949 paper by T. S. Ashton, has focused on other measures of living standards, especially wages. Ashton himself used changes in the cost of living-measured by the prices of basic commodities-to conclude that real wages rose after 1820.

The debate heated up considerably during exchanges between the pessimist Eric Hobsbawm and the optimist Max Hartwell in the late 1950s and early 1960s. According to Hobsbawm, Ashton’s evidence on real wages was inconclusive. He argued that high unemployment indicated that living standards may have deteriorated before 1840. Hobsbawm stressed that evidence on consumption also implied that living standards did not rise and may have fallen between 1790 and 1840. He placed particular emphasis on these estimates of consumption, reasoning that a decline in food consumption per person indicated a decline in the standard of living. He noted that the number of beef and sheep slaughtered at various markets failed to keep pace with the growth of population before 1840.

Hartwell criticized Hobsbawm’s use of evidence. The problem with looking at the volume of beef and sheep sold at particular markets, he noted, was that new markets were appearing. Hartwell also emphasized the appearance of new, previously unavailable consumer goods after 1820, such as popular periodicals, inexpensive cotton clothing, and the exotic fruits made available by improved transportation. But Hartwell’s main point was that few theories can explain falling real wages in the face of economic growth-particularly when rising labor productivity accompanied that growth. He emphasized that it would take implausibly high increases in unemployment or inequality for living standards to fall when average income was rising.

The debate gradually receded into the background until a 1983 paper by Peter Lindert and Jeffrey Williamson brought new life to the controversy. Lindert and Williamson produced new estimates of real wages for the years 1755 to 1851. Their estimates were based on money wages for workers in several broad categories, including both blue-collar and white-collar occupations. Their cost of living index attempted to represent actual working-class budgets.

The Lindert-Williamson series produced two striking results. First, real wages grew slowly between 1781 and 1819. Second, after 1819 real wages grew rapidly for all groups of workers. For all blue-collar workers-a good stand-in for the working classes-the Lindert-Williamson index number for real wages rose from 50.19 in 1819 to 100 in 1851. That is, real wages doubled in just thirty-two years.

Lindert and Williamson’s findings were reinforced by estimates that economist Charles Feinstein made of consumption per person for each decade between the 1760s and 1850s. He found a small rise in consumption between 1760 and 1820 and a rapid rise after 1820. Other evidence that supported the hypothesis of rising real wages came from statistics on life expectancy at birth and on literacy rates. According to historians E. A. Wrigley and Roger S. Schofield’s population history of England, life expectancy at birth rose from thirty-five years to forty years between 1781 and 1851. A modest increase in literacy in the generation before 1840 also supported Lindert and Williamson.

Although the evidence favors the optimists, doubts remain. For example, pessimists have long maintained that the largely unmeasurable effects of environmental decay more than offset any gains in well-being attributable to rising wages. Wages were higher in English cities than in the countryside, but rents were higher and the quality of life was lower. What proportion of the rise in urban wages reflected compensation for worsening urban squalor rather than true increases in real incomes? Williamson-using methods developed to measure the ill effects of twentieth-century cities-found that between 8 and 30 percent of the higher urban wages could be attributed to compensation for the inferior quality of life in English cities. Yet even the 30 percent estimate was much too small to fully offset the rise in real wages before 1850.

Another criticism of Lindert and Williamson’s optimistic findings is that their results hold only for workers who earned wages. We do not know what happened to people who worked at home or were self-employed. Because the consumption per person of tea and sugar failed to rise along with real wages, Joel Mokyr has suggested that workers who were not in the Lindert-Williamson sample may have suffered sufficiently deteriorating real incomes to offset rising wage income and leave the average person no better off.

Contemporary pessimists argue that for at least some part of the industrial revolution the happiness and well-being of the lower classes was not rising much, if at all. Even if one accepts their argument, however, it is not necessary to abandon the optimists’ position. For example, the industrial revolution had a positive effect on real income, but its positive effect may well have been offset by the negative effect of frequent wars (the American Revolution, the Napoleonic wars, the War of 1812). Some economic historians include bad harvests, rapid population growth, and the costs of transforming preindustrial workers into a modern labor force as additional causes of slow growth before 1820.

So careful economic research has narrowed the debate. Whether one is an optimist or pessimist today depends on whether one believes that the sustained rise in real wages began in the 1820s or the 1840s. Virtually all participants agree that growth was slow at best before 1820 and rapid after 1840.

Posted in American Culture, American History, Economics, Government and Politics, Intellectual History, Moral Philosophy, Political Philosophy, Poverty | Tagged: , , , , , , , , , , , , , | 1 Comment »

A Beer Story: Tax Cuts for the Wealthy

Posted by Tony Listi on March 21, 2008

The wealthy pay most of the taxes, so it should be no surprised that they get a larger percentage of the tax cut total back!  It is only fair. 

——

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that’s what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ‘Since you are all such good customers, he said, ‘I’m going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’ They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

‘I only got a dollar out of the $20,’declared the sixth man. He pointed to the tenth man,’ but he got $10!’

‘Yeah, that’s right,’ exclaimed the fifth man. ‘I only saved a dollar, too. It’s unfair that he got ten times more than I!’

‘That’s true!!’ shouted the seventh man. ‘Why should he get $10 back when I got only two? The wealthy get all the breaks!’

‘Wait a minute,’ yelled the first four men in unison. ‘We didn’t get anything at all. The system exploits the poor!’

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia

Posted in American Culture, Budget, Spending, and Taxes, Economics, Government and Politics, Poverty | Tagged: , , , , , , , , , | 25 Comments »

Myths Christians Believe About Wealth and Poverty

Posted by Tony Listi on March 12, 2008

Please listen to http://www.acton.org/daily/nowatacton_200709051337.php

1. The Piety Fallacy: Good intentions are all that matter. Piety is no substitute for technique. Good intentions are no substitute for good consequences. God holds us accountable for our intentions, but public policy should help people regardless of the nature of intentions. God asks us to love him with all our mind too, so he holds us responsible for the manifest consequences of our actions (something apprehended by the mind). (e.g. rent control, child labor)

2. The Freeze Frame Fallacy: Assuming certain trends or demographics will always stay the same. A single point in time and place is not representative of all reality. Things change. Life is not static. (e.g. population growth)

3. The Artsy Myth: Confusing aesthetics and economics; attributing ugliness or harshness to the free market. Such aesthetic judgments may be true, but such judgments should not be made in isolation, cut-off from economic realities. But poverty is not pretty either. Beauty is expensive; don’t punish the poor just so you have something nice to look at or feel good about something. Heed Maslow’s hierarchy of needs: physical needs come before aesthetics. (e.g. corporations like Wal-Mart)

4. Zero-Sum Game Myth: If I become rich, doesn’t that make someone else poor? The wealth of the First World causes the poverty of the Third World. Economics is not like chess, checkers, sports, or war. The free market (and free trade) is a win-win game overall, not a win-lose game, though not everyone ends up on top. Our GDP goes up over time and correlates to free trade. The pie is not static; it grows.

We are created in the image and likeness of God. God is a creator and so are we! We are his co-creators, and so there is nothing evil about business or production. Rather business people imitate the creative nature of God in providing goods and services.

Q&A: 
Bill Gates of all people should know how wealth is created and yet even he doesn’t get it. Rather than making the Third World productive, he would prefer to make the Third World dependent and thus permanently vulnerable to poverty.

Is all this talk about income inequality merely a reflection of the entrenched  materialism in our culture that in turn fosters envy and jealousy of others success and wealth? Most likely. One can reduce envy by making everyone poor (a possibility) but not by making everyone rich (impossible).

People who are taxed the highest give the least to charity. Conservatives give more to charity too (http://www.arthurbrooks.net/index.html). Compassion literally means “to suffer together.” It is hard to suffer with the poor using someone else’s money.

What is the moral relevancy of a person who becomes wealthy through free exchange? None.

Posted in American Culture, Christianity and Politics, Economics, Government and Politics, Politics and Religion, Poverty | Tagged: , , , , , , , , , , | 2 Comments »

Mandated Giving Doesn’t Come from the Heart

Posted by Tony Listi on March 11, 2008

My fellow Christians, take heed!

http://www.acton.org/publications/randl/rl_174article04.php  

By Robert A. Sirico

It seems that some Biblical fallacies never go away, especially as regards redistribution and the poor. Hardly a day passes when I don’t hear some version of the following: The Gospels speak clearly on the issue of the poor. They must be cared for. Special obligation falls to the rich who have the resources to care for them. This country has programs in place that are designed to do just that. Therefore, Christians have an obligation to politically support these programs.

The problem here is the slick move from personal ethics to public policy. What is required of us as individuals may or may not translate into a civic policy priority. In the case of the welfare state, it is possible to argue that it does great good (though I would dispute that). Whether it does or does not, however, a government program effects nothing toward fulfilling the Gospel requirement that we give of our own time and income toward assisting the poor.

The reason has to do with matters of the human heart. If we are required to do anything by law, and thereby forced by public authority to undertake some action, we comply because we must. That we go along with the demand is no great credit to our sense of humanitarianism or charity. The impulse here is essentially one of fear: we know that if we fail to give, we will find ourselves on the wrong side of the state.

Remember that the government has no money, no resources, of its own. Everything it has it must take from the private sector, which is the engine of wealth creation. If we can imagine a world in which there is no private sector at all, we can know with certainty that it would be a world of bare subsistence at best: universal impoverishment.

Wealthy societies today can afford to create large welfare states while avoiding that fate. But let us never forget the funds that make it possible do not appear as if by magic. They are taken from others without their active consent except in the most abstract sense that people might vote for them.

I cannot see how this method of redistributing wealth has anything to do with the Gospel. Jesus never called on public authority to enact welfare programs. He never demanded that his followers form a political movement to tax and spend. Nor did he say that the property of the rich must always be forcibly expropriated. He called for a change in the human heart, not a change in legislation. There is a massive difference.

There are other grave dangers in confusing the welfare state with personal charitable obligation. The more people hear that the welfare state discharges their moral mandate to give, the more these programs crowd genuine charity. “I gave at the office,” becomes the attitude. This is essentially what was behind the comment by Ebenezer Scrooge in A Christmas Carol when he dismissed his need to be charitable. “Are there no poorhouses?”

There are further problems. The programs are not effective over the long term. They generate dependency and bureaucracy. They create upside-down incentives. But leaving all that aside, the core message here is that, from a moral point of view, they do not fulfill the criterion that the Gospels specify for generosity, which must come from within and cannot be imposed from the top down.

Rev. Robert A. Sirico is president of the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Michigan.

Posted in American Culture, Budget, Spending, and Taxes, Christianity and Politics, Economics, Government and Politics, Moral Philosophy, Political Philosophy, Politics and Religion, Poverty, Socialism | Tagged: , , , , , , , , , | 2 Comments »

The Inequality Myth

Posted by Tony Listi on March 10, 2008

http://www.ncpa.org/sub/dpd/index.php?Article_ID=15682 

While figures from the U.S. Census give some substance to the fears of widening inequality and middle-class stagnation, the situation is not nearly as clear-cut, says Brad Schiller, a professor of economics at American University and the University of Nevada, Reno.

In its latest report, the Census Bureau tracked changes in incomes all the way back to 1967.  Two observations grabbed the headlines.

First:

  • The data indicate that the top-earning 20 percent of households get half of all the income generated in the country, while the lowest-earning 20 percent of households get a meager 3.4 percent.
  • That disparity has widened over time; in 1970, their respective shares were 43.3 percent and 4.1 percent.
  • These income-share numbers buttress the popular notion that the “rich are getting richer while the poor are getting poorer.”

Second:

  • The median household income in 2006 was $48,201, just a trifle ahead of its 1998 level ($48,034).
  • That seems to confirm the Democrat candidate’s claims of middle-class stagnation.

Demographic changes in the size and composition of U.S. households have distorted the statistics in important ways, explains Schiller:

  • All the Census Bureau tells us is that the share of the pie consumed by the poor has been shrinking (to 3.4 percent in 2006 from 4.1 percent in 1970); but the “pie” has grown enormously.
  • This year’s real gross domestic product (GDP) of $14 trillion is three times that of 1970. So the absolute size of the slice received by the bottom 20 percent has increased to $476 billion from $181 billion.
  • Allowing for population growth shows that the average income of people at the bottom of the income distribution has risen 36 percent.

They’re not rich, but they’re certainly not poorer.  In reality, economic growth has raised incomes across the board, says Schiller.

Source: Brad Schiller, “The Inequality Myth,” Wall Street Journal, March 10, 2008.

For text:

http://online.wsj.com/article/SB120511125873823431.html  

For more on Economic Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=17

Posted in Government and Politics, Poverty, Socialism | Tagged: , , , , , , | 5 Comments »

Wealth, Work, and the Church

Posted by Tony Listi on March 6, 2008

WATCH THIS VIDEO: http://www.acton.org/media/20080214_wealth_work_church.php

The Christian tradition has always held an ambivalent position toward wealth. The Bible itself seems to condemn the rich and extol the poor, though Abraham, David, and Solomon were obviously very wealthy yet godly men. Recently, the “Prosperity Gospel” promoted in some Pentecostal Churches has argued that it is God’s will that all true believers should receive material blessings and that poverty is a curse. This lecture will explore the biblical foundations of work and wealth creation in light of the history of the Church to find the proper balance between these competing ideas of the place of earthly riches in Christianity.

This is just the best presentation I’ve ever seen of what the Bible really says about wealth, the rich, and economics in general! It cites Scripture and interprets them with clarity and authority.

Posted in Christianity and Politics, Economics, Government and Politics, Moral Philosophy, Political Philosophy, Politics and Religion, Poverty, Religion and Theology | Tagged: , , , , , , , , , , , | 1 Comment »