[I]t is an uncomfortable truth that children of divorce and children with unmarried parents tend to do much worse in life than children of two-parent families.
(I’ll leave aside the sensitive issue of children of same-sex marriages, since these haven’t existed in a non-stigmatized atmosphere long enough to produce measurable results.)
As Schulz points out, that uncomfortable truth is not controversial among social scientists. It is affirmed by undoubted liberals such as Harvard’s David Ellwood and Christopher Jencks.
Growing up outside a two-parent family means not just lower incomes and less social mobility, Schulz argues.
It also reduces human capital — “the knowledge, education, habits, will power — all the internal stuff that is largely intangible a person has that helps produce an income.”
While children are born with certain innate capacities, those capacities can be broadened or narrowed by their upbringing.
The numbers indicate that single or divorced parents — however caring and dedicated — are unable, on average, to broaden those capacities as much as married parents can.
These differences have sharp implications for upward mobility.
Schulz points to an Economic Mobility Project analysis showing that, among children who start off in the bottom third of the income distribution, only 26% with divorced parents move up, compared to 42% born to unmarried mothers (who may marry later, of course) and 50% who grow up with two married parents.
All this matters more than it used to because two-parent families are much more uncommon than they used to be. In 1960 about three-fourths of Americans 18 and over were married. In 2011, less than half were.
Now, you might say to yourself “what exactly have the secular left down to improve the income mobility of the poor by promoting marriage?” And the answer would be that the left promotes premarital sex for people who are not even ready for marriage, made contraceptives taxpayer-funded, subsidized the largest provider of abortions with hundreds of millions of dollars, promoted the first redefinition of marriage through their feminism and trial lawyer lobbying groups, and now redefined marriage to mean either no biological father or no biological mother. Barack Obama himself has praised every other kind of non-traditional family arrangement as being equal to the traditional family. That’s the sort of nonsense that passes for wisdom on the morally relativistic left. They just don’t like the idea that there are moral rules that apply to sexual activity.
The left isn’t really interested in income mobility. They talk about it as if it’s a problem, but their “solutions” to the problem actually make the problem worse.
Have you read Jay Richards’ book “Money, Greed and God?” Because if you haven’t, he’s written a series of articles that summarize the main points of the book.
Part 1: The Eight Most Common Myths about Wealth, Poverty, and Free Enterprise
Part 2: Can’t We Build A Just Society?
Part 3: The Piety Myth
Part 4: The Myth of the Zero Sum Game
Part 5: Is Wealth Created or Transferred?
Part 6: Is Free Enterprise Based on Greed?
Part 7: Hasn’t Christianity Always Opposed Free Enterprise?
Part 8: Does Free Enterprise Lead to An Ugly Consumerist Culture?
Part 9: Will We Use Up All Our Resources?
Part 10: Are Markets An Example of Providence?
Parts 4 and 5 are my favorites. It’s so hard to choose one to excerpt, but I must. I will choose… Part 4.
Here’s the problem:
Myth #3: The Zero Sum Game Myth – believing that trade requires a winner and a loser.
One reason people believe this myth is because they misunderstand how economic value is determined. Economic thinkers with views as diverse as Adam Smith and Karl Marx believed economic value was determined by the labor theory of value. This theory stipulates that the cost to produce an object determines its economic value.
According to this theory, if you build a house that costs you $500,000 to build, that house is worth $500,000. But what if no one can or wants to buy the house? Then what is it worth?
Medieval church scholars put forth a very different theory, one derived from human nature: economic value is in the eye of the beholder. The economic value of an object is determined by how much someone is willing to give up to get that object. This is the subjective theory of value.
And here’s an example of how to avoid the problem:
How you determine economic value affects whether you view free enterprise as a zero-sum game, or a win-win game in which both participants benefit.
Let’s return to the example of the $500,000 house. As the developer of the house, you hire workers to build the house. You then sell it for more than $500,000. According to the labor theory of value, you have taken more than the good is actually worth. You’ve exploited the buyer and your workers by taking this surplus value. You win, they lose.
Yet this situation looks different according to the subjective theory of value. Here, everybody wins. You market and sell the house for more than it cost to produce, but not more than customers will freely pay. The buyer is not forced to pay a cost he doesn’t agree to. You are rewarded for your entrepreneurial effort. Your workers benefit, because you paid them the wages they agreed to when you hired them.
This illustration brings up a couple important points about free enterprise that are often overlooked:
1. Free exchange is a win-win game.
In win-win games, some players may end up better off than others, but everyone ends up better off than they were at the beginning. As the developer, you might make more than your workers. Yet the workers determined they would be better off by freely exchanging their labor for wages, than if they didn’t have the job at all.
A free market doesn’t guarantee that everyone wins in every competition. Rather, it allows many more win-win encounters than any other alternative.
2. The game is win-win because of rules set-up beforehand.
A free market is not a free-for-all in which everybody can do what they want. Any exchange must be free on both sides. Rule of law, contracts, and property rights are needed to ensure exchanges are conducted rightly. As the developer of the house, you’d be held accountable if you broke your contract and failed to pay workers what you promised.
An exchange that is free on both sides, in which no one is forced or tricked into participating, is a win-win game.
On this view, what you really need to fear as a consumer is government intervention that restricts your choices in the marketplace.
Free trade in the real world
This is not a theoretical problem, either. Millions of people in the Ukraine are protesting against Vladimir Putin and his restrictive Russian policies in order to get more economic freedom by signing a free trade deal with the European Union.
Hundreds of thousands of protesters swarmed Ukraine’s capital Kiev on Sunday, where the country’s opposition leaders urged them to continue heaping pressure on President Viktor Yanukovich to sack his government and abandon plans for closer ties with Russia.
Many of the demonstrators who gathered at the city’s central Independence Square are furious with the government over its decision to back out of a historic agreement with the European Union in favour of a possible trade deal with Russia, Ukraine’s Soviet-era ruler.
The protest . . . is just the latest sign of mounting tensions in Ukraine over the past two weeks, raising fears over the country’s political and economic stability.
That’s a real crisis: freedom-loving people fighting for their right to be prosperous by adopting the economic policies that produce wealth.
If you care about poverty, it’s often tempting to think that it can only be solved one way – by transferring wealth from the rich to the poor. But that is a very mistaken view, as any economist will tell you. The right way to create prosperity is by creating laws and policies that unleash individual creativity. Letting individuals create innovative products and services, letting them keep what they earn, making sure that the law doesn’t punish entrepreneurs – that incentivizes wealth creation. Fixing poverty does not mean transferring wealth, it means giving people more freedom to create wealth on their own. Free trade between nations is an important way that we encourage people to create better products and services that what they have available in their own countries.
Economists agree on the benefits of free trade
Who could possibly disagree with free trade? Well, many people on the left do. They favor imposing restrictions on free trade. For example, people on the left favor making those who import goods pay tariffs, which makes it harder to trade with other nations. People on the left want to pass rent control laws to block landlords and tenants from trading more freely. People on the left want to pass minimum wage laws that block employers and workers from trading wages for labor more freely. But economists generally don’t agree with any of restrictions on free trade. In fact, even across the ideological spectrum, the majority of economists view free trade as a wealth creating policy, and restrictions on free trade as a wealth destroying policy.
Here is the list, together with the percentage of economists who agree:
A ceiling on rents reduces the quantity and quality of housing available. (93%)
Tariffs and import quotas usually reduce general economic welfare. (93%)
Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
The United States should not restrict employers from outsourcing work to foreign countries. (90%)
The United States should eliminate agricultural subsidies. (85%)
Local and state governments should eliminate subsidies to professional sports franchises. (85%)
If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
A large federal budget deficit has an adverse effect on the economy. (83%)
A minimum wage increases unemployment among young and unskilled workers. (79%)
The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)
Now when you are talking to a Democrat, you are talking to someone who disagrees with most or all of those common sense economic policies. For example, Obama’s backers in the labor movement inevitably endorse higher import tariffs, which discourage free trade between countries. No economist supports these tariffs on imports, because history has shown (e.g. – Smoot-Hawley Act) that tariffs destroy economic growth and reduce wealth creation. And that’s what I mean when I talk about economic illiteracy – I mean ignoring what we know from economics and our own experience with bad policies when we make policy.
Democrat economic policies don’t work because they are making policies that are based on economic myths. We know that these myths are myths because of economics is a mathematical science, and because we have tried good and bad policies in different times and places. We have calculations and we have experience to know what works and what doesn’t work. If you want to help the poor, you have to respect what economists know about how wealth is created. The solution is not to “spread the wealth around”, it’s to encourage people to create more wealth by inventing things that people freely choose to buy.
Jay Richards, Ph.D., is a Senior Fellow of the Discovery Institute where he directs the Center on Wealth, Poverty and Morality, and is a Visiting Scholar at the Institute for Faith, Work & Economics. Most recently he is the co-author with James Robison of the best-selling Indivisible: Restoring Faith, Family, and Freedom Before It’s Too Late”.
In addition to writing many academic articles, books, and popular essays on a wide variety of subjects, he recently edited the new award winning anthology, God & Evolution: Protestants, Catholics and Jews Explore Darwin’s Challenge to Faith . His previous book was Money, Greed, and God: Why Capitalism Is the Solution and Not the Problem (HarperOne, May 2009), for which he received a Templeton Enterprise Award in 2010.
[…]In recent years, he has been a Contributing Editor of The American at the American Enterprise Institute, a Visiting Fellow at the Heritage Foundation, and a Research Fellow and Director of Acton Media at the Acton Institute. Richards has a B.A. with majors in Political Science and Religion, an M.Div. (Master of Divinity) and a Th.M. (Master of Theology), and a Ph.D. (with honors) in philosophy and theology from Princeton Theological Seminary.
Jim Wallis:
Jim Wallis (born June 4, 1948) is a Christian writer and political activist. He is best known as the founder and editor of Sojourners magazine and as the founder of the Washington, D.C.-based Christian community of the same name. Wallis is well known for his advocacy on issues of peace and social justice. Although Wallis actively eschews political labels, he describes himself as an evangelical and is often associated with the evangelical left and the wider Christian left. He works as a spiritual advisor to President Barack Obama. He is married to the Rev. Joy Carroll, who was one of the first female priests in the Church of England. He is also a leader in the Red-Letter Christian movement.
[…]In 2010, Wallis admitted to accepting money for Sojourners from philanthropist George Soros after initially denying having done so. When conservative writer Marvin Olasky pointed this out, and that Soros also financed groups supporting abortion, atheism, and same-sex marriage, in a WORLD magazine column, Wallis said Olasky “lies for a living”; he subsequently apologized to Olasky for the comments. In 2011, Wallis acknowledged that Sojourners had received another $150,000.00 from Soros’ Open Society Foundation.
[…]In regard to the 2011 United States budget proposal, Wallis described Congressman Paul Ryan and his congressional allies as “bullies” and “hypocrites.”
Wallis just came out this month in favor of gay marriage. He is also a strong supporter of Barack Obama, who is radically pro-abortion. Some pro-lifers have argued that Barack Obama has the same views on abortion as Kermit Gosnell.
The format of the debate
20 minute opening speeches
10 minute rebuttals
10 minutes of discussion
Q&A for the remainder
SUMMARY
I use italics below to denote my own observations.
Jim Wallis’ opening speech:
My goal is to spark a national conversation on the “common good”.
A story about my son who plays baseball.
The central goal of Christianity is to promote the “common good”.
Quotes “Catholic social teaching” which values “human flourishing”.
The “common good” is “human flourishing”.
Is the purpose of Christianity is to make sure that everyone has enough material stuff or to preach the gospel?
When Christians go on mission trips, it’s good that they focus on things like human trafficking.
Democrat John Lewis is the “conscience of the U.S. Congress”.
John Lewis gets a 0% rating from the American Conservative Union in 2012.
John Lewis gets a 8% rating from the American Conservative Union in 2011.
John Lewis gets a 2.29% lifetime rating from the American Conservative Union.
Nothing is going well in Washington right now except comprehensive immigration reform.
Does he think that Christianity means giving 12-20 million illegal immigrants a path to citizenship, while skilled engineers cannot even get green cards, even though there is a shortage of them? Does he think that the other people in society who earn more than they receive from the government ought to be taxed more in order to provide more services and benefits to those who earn less than they take from the government?
Jay Richards’ opening speech:
Two topics: 1) what is the common good? 2) what should Christians do to promote the common good?
Catholicism defines the “common good” as “Indeed, the common good embraces the sum of those conditions of the social life whereby men, families and associations more adequately and readily may attain their own perfection.”
We have natural ends that we are supposed to be achieving and some places, like South Korea, are better for allowing that to happen.
The common good is broader and prior to any sort of political specification.
It’s not the political good or what the state is supposed to do.
It’s not about the communal good, as in Soviet Russia, where the communal good was above individual and familial good.
The common good is the social conditions that promote the things that we humans have in common as individuals and members of family.
The common good takes account of who we are as individuals and in associations with other individuals, e.g. – families.
Christians don’t have to be doing the same things to promote the common good, e.g. – pastors, entrepreneurs, etc.
The church, as the church, has as its primary goal making disciples of all nations.
But even in that capacity, the church should be interested in more than just conversions and saving souls.
We also have to care about God’s created reality including things like physics, education, etc.
How should Christians promote the common good in politics?
Question: when is coercion warranted?
In Romans 13, Paul says that the state does have power to coerce to achieve certain ends, like justice.
Most Christians think that there are some things where the state can use coercion, for example, to prevent/punish murder.
It is OK for the police to use coercive force to maintain public order and the rule of law.
But we need to ask whether other things are legitimate areas for the state to use coercive force.
We should only give the state power to coerce when there is no other way to achieve a goal.
We need to leverage the science of economics in order to know how to achieve the common good.
Jay Richards’ main point in the debate
Henry Hazlitt: “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
For example, what happens if we raise the federal minimum wage to $50. What happens next for all groups? That’s what we need to ask in order to know which policies achieve the common good.
When it comes to economics a lot of things have been tried in other places and times.
We can know what works and doesn’t work by studying what was tried before and in other places.
Many things are counter-intuitive – things that sound good don’t work, things that sound bad do work.
Principle: “We are our brother’s keeper”. Christians have an obligation to care for their neighbors.
We all agree on the goal. But how do we do things that will achieve that goal?
We have to distinguish aspirations from principles and prudential judgment.
Principle: We should provide for the material needs of the poor.
Prudence: Seeing the world as it is, and acting accordingly.
Example policies: which minimum wage is best? None? $10? $20?
We decide based on seeing how different economic policies achieve the goal of helping the poor.
Jim Wallis’ first rebuttal:
Jesus commanded us to “care for the poor and help to end poverty”.
Actually, Jesus thought that acknowledging him and giving him sacrificial worship was more important than giving money to the poor, see Matthew 26:6-13:
6 While Jesus was in Bethany in the home of Simon the Leper,
7 a woman came to him with an alabaster jar of very expensive perfume, which she poured on his head as he was reclining at the table.
8 When the disciples saw this, they were indignant. “Why this waste?” they asked.
9 “This perfume could have been sold at a high price and the money given to the poor.”
10 Aware of this, Jesus said to them, “Why are you bothering this woman? She has done a beautiful thing to me.
11 The poor you will always have with you, but you will not always have me.
12 When she poured this perfume on my body, she did it to prepare me for burial.
13 Truly I tell you, wherever this gospel is preached throughout the world, what she has done will also be told, in memory of her.”
It’s not clear to me whether Jim Wallis thinks that preaching is more important than redistributing wealth to address material inequality.
I like what Jesus said in a TV series, even though it’s not in the Bible when an actor playing Jesus said to “change the world”.
Jesus never said to “change the world” in the Bible. Should we be concerned that he is quoting a TV actor playing Jesus instead of Jesus.
Here is a terrific story about Bill Bright.
I love Catholic social teaching.
Quote: “All are responsible for all”.
I go to the World Economic Forum at Davos, Switzerland every year. I spoke once at 7 AM on the 4th floor.
It’s a funny place for a Christian to be if they care about the poor – rubbing shoulders with leftist elites. He must have named a dozen high-profile people that he spoke with during the debate, as if he could win the debate by some sort of argument from name-dropping. He mentioned the Davos thing several times!
The greatest beneficiary of government actions to deal with the economic crisis was Wall Street banks.
I’m going to tell you a story about what a Washington lawyer says to Jesus.
I’ve had conversations with business leaders where I tell them to integrate moral truths.
I talk about the Good Samaritan parable.
Quote: “Do you love your undocumented neighbor?”
Quote: “Do you love your Muslim neighbor?”
Jay Richards’ first rebuttal:
Who is responsible for your own children? Who knows the most about them?
Parents should have more discretion over their children because they have more knowledge about their child and what’s best for them.
The Good Samaritan doesn’t show that government should confiscate wealth through taxation and redistribute it.
The Good Samaritan emphasizes voluntarily charity to help people who are not necessarily your immediate neighbor.
Some of the things we do should be for the good of other people in other countries.
But then we are back to leveraging economics to know what policies are good for those other people in other countries.
The principle of subsidiarity: if a problem can be addressed by a lower level of society (family) then we shouldn’t make higher levels (government) address it.
The best place to take care of children is within the family.
Only if the family fails should wider and wider spheres get involved.
Although we want to think of the common good in a global sense, we don’t want to lose sight of the fact
The financial crisis: we need to integrate moral truths, but also economic truths.
We don’t want to assume policies based on intuitions, we want to check our intuitions using economic principles.
Why did we have a financial crisis in mortgages, but not in commodities futures or technology, etc.?
Greed is a contributing factor in all areas of business.
Something more was going on in the mortgage markets than just greed.
There were specific policies that caused the mortgage lending crisis.
The root cause of the problem were “affordable housing policies” that lowered lending restrictions on low income people.
The policy ended up degrading the underwriting standards on loans.
Government intruded into the market and undermined the normal ways of
People were getting massive loans with no income, no jobs, no assets and no down payment.
The federal government created a market for risk loans by guaranteeing
There was a government imposed quota on mortgage lenders such that 50% of their loans had to be given to high-risk borrowers.
That is what led to the financial crisis. Not the free market, but intrusions into the free market.
These policies were well-meaning and implemented by people from both parties. But they had bad effects.
WINTERY KNIGHT 