Democrat Economic Illiteracy Example #4972

Here are three very smart economists and our most business-savvy politician explaining why bailing out Detroit is a terrible idea.  It should already be obvious if you understand how markets and competition are actually supposed to work, but read them anyway:

David Yermack
Mitt Romney
Jim Lindgren
Todd Zywicki

Now let’s look at the Democrats’ “solution”

Mickey Kaus summarizes it as:

The New Plan? Cripple Honda! Save Detroit with Card Check! Eliminating the secret ballot and making it easier to organize U.S. Honda and Toyota workers (and imposing contract terms via binding arbitration) would “level the playing field,” says Dem. Congressman Tim Ryan. … Then when Honda and Toyota responded by importing more cars from abroad, we could have import quotas! Eventually the whole automotive sector could be planned by Congress in conjunction with existing business and labor interest groups.

Oh, this is going to be a delightful four years.

Markets, Morality & Conflation

There’s an interesting discussion going on at the Corner on NRO about the meaning of “free market” and its defense on moral vs. empirical grounds.

You can follow some of it here:

Post 1
Post 2
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Post 6

Over at CATO, Roderick Long, who considers himself a member of the Libertarian Left (a term that always annoys me — but that’s a topic for another post), has an article dealing with the conflation of laissez-faire markets with corporatism. It touches on some of the same topics.

If you are at all interested in economics or economic philosophy, his article is HIGHLY recommended.

Sunday School for Socialists

Lately, I’ve heard a lot of lefties on TV and elsewhere trying to argue that the New Testament supports the idea of government-enforced wealth redistribution, a la Obama.  In fact the Voice of the Messiah himself has made that claim (in more general terms) in several of his speeches.  This is certainly not a new idea of course; it’s been around for centuries.  The most often quoted verses used to back up the argument seem to be:

Acts 2:42-47:

42They devoted themselves to the apostles’ teaching and to the fellowship, to the breaking of bread and to prayer. 43Everyone was filled with awe, and many wonders and miraculous signs were done by the apostles. 44All the believers were together and had everything in common. 45Selling their possessions and goods, they gave to anyone as he had need. 46Every day they continued to meet together in the temple courts. They broke bread in their homes and ate together with glad and sincere hearts, 47praising God and enjoying the favor of all the people. And the Lord added to their number daily those who were being saved.”

or the similar Acts 4:32-35:

32All the believers were one in heart and mind. No one claimed that any of his possessions was his own, but they shared everything they had. 33With great power the apostles continued to testify to the resurrection of the Lord Jesus, and much grace was upon them all. 34There were no needy persons among them. For from time to time those who owned lands or houses sold them, brought the money from the sales 35and put it at the apostles’ feet, and it was distributed to anyone as he had need.”

or any of the verses containing Jesus’ exhortations to certain individuals to sell their possessions or to his followers to care for the poor.

And while this is not new, it’s an idea that seems to be gaining traction among Christians as of late.  This is not too surprising considering that so many are suddenly bending over backwards trying to justify voting for a presidential candidate and a party whose policies they know contradict a quite a few Christian principles.  So I thought it’s about time I posted a little response to this argument.  Perhaps someone may find it useful.

There are MANY reasons why using these verses to support government-enforced wealth redistribution (i.e. socialism) is really a gross misapplication of scripture.  I don’t quite have time to draft the 50-page fully-footnoted essay that is required for this, but I’ll attempt a few critical points at least:

  1. The church as described in Acts was a small group of seriously dedicated Christians who were voluntarily sharing their resources so they could all concentrate their efforts on their #1 goal: spreading the Gospel.  This is hardly analogous to a huge secular government of 300 million culturally and religiously diverse people, most of whom are primarily concerned with promoting their own self-interest.
     
  2. Membership in the church was completely voluntary.  Like other private charities, church-based charity has a chance of actually being effective precisely because it is voluntary.  Donors can stop giving when they see corruption and mismanagement or they can leave and form new organizations.  In other words, the church or charity is accountable to the givers.  With government it’s exactly the opposite.  You are forced to give no matter what.  Those who decide to spend your money have no incentive to be efficient and are motivated primarily by political considerations (i.e. buying votes by handing out other people’s money) rather than doing what is effective.  In other words, they are held “accountable” by the recipients – a pretty bad idea for obvious reasons.
     
  3. Giving can be effective within a church (or private charity) because the church can demand a change in behavior as a condition for remaining in the church (the Acts church certainly did!) and therefore it has some real chance of success.  Government can’t do that without “legislating morality” (not a government with a First Amendment, anyway).  Nor is there any reason why politicians would feel the need to demand a change in behavior.  Quite the opposite.  Nobody wants to be told they have to change their behavior as a condition for receiving free handouts from the government.  Instead, they will always vote for the politicians who give them what they want.  That’s why when government tries to do charity work it usually ends up rewarding people for bad behavior and punishing them for being responsible.  And it partially explains why government entitlement programs are not only horribly inefficient and prone to corruption and abuse, but they usually just exacerbate the problems they are supposed to solve.
     
  4. In the New Testament there actually were a certain group of people that supported the idea of government-run wealth redistribution.  They were the Pharisees.  And they went around lecturing people about paying the various temple taxes* (much of it to be used for the poor) and bragging about how generous they were.  Sounds a lot like a certain one of our political parties.
     
  5. People on the political right who are anti-socialist are also usually very pro-voluntary giving.  That’s why conservatives give much more to charity than liberals.  And I mean higher percentages, not just higher dollar amounts.  So, considering how effective the (private and voluntary) Acts Church was, I think the example actually makes a pretty strong argument AGAINST socialism.

Remember, Jesus said YOU should give to the poor.  He didn’t say “go get a group of your friends together and force your rich neighbor to do it, at the point of a sword, so that you won’t have to give as much.”  In fact, that kind of thinking is pretty much the exact opposite of what Jesus taught.  But THAT’s what you have to believe he meant in order to argue that his teachings support government-enforced wealth redistribution!

And all this is just a partial argument against using the Bible to justify socialist economic policy.  It doesn’t even deal with the numerous Biblical principles it violates.  On top of that, the practical, experiential and economic arguments against socialism are even more extensive and more persuasive than the scriptural ones, IMHO.  But I could fill a book with those so I’ll leave them for another time.

*Yes, I know the temple taxes were imposed by the the religious government, not Rome, and most Pharisees did not like the idea of paying taxes to Rome, but the temple still had actual government authority and the temple taxes were not voluntary.

UPDATE 10/31: For a good Biblical example of what happens when you substitute the state for what is properly the role of the church, see: I Samuel 8:10-18.  (It’s interesting that Samuel considers an additional 10% tax to be an example of oppression.)

UPDATE 11/01: Added some links, minor edits and an asterisk.