10/26/2008

The Virtue of Selfishness

I was in college when Ayn Rands book first came out but now might be a good time to discuss again her approach to Laissez-faire free market capitalism.

keith drury

17 comments:

Pastor Rod said...

Keith,

I "believe" in the free market for purely pragmatic reasons. I am convinced that it is more efficient than other systems.

This is not to say that it is more humane or more just. One of the mistakes politically-conservative Christians have made is to confuse morality with efficiency.

Another mistake is to dismiss the harm caused to individuals by the free market because of the greater good it produces for the majority.

While I prefer a market-based economy, I also think that society has an obligation to care for its weaker members.

The "virtue" of a market-based system is that greed and selfishness tend to be self-regulating. The major threat comes from individuals and corporations trying to cheat the system.

The key is to keep the free market free.

A planned economy, on the other hand, is an open invitation to corruption and exploitation. Too much power is concentrated in a few individuals.

Consequently, I would like to see a free market with some of the economic benefit "taxed" to care for individuals who suffer as the market corrects "supply" to match "demand."

An example would be free trade between countries. If the US stopped protecting the widget industry and allowed Americans to buy cheaper widgets produced in China, the people who make widgets domestically would likely lose their jobs. But everyone benefits because of the lower price. A small percentage of that savings would be sufficient to compensate the newly unemployed and to train them for alternative occupations.

I hope this advances the discussion.

[Sorry for making my comment longer than your original post.]

Rod

Keith Drury said...

ROD. I can always count on you for a thoughtful post! To see Rod's regular blogging
go here

::athada:: said...

Would like to hear Burt's take on this as it relates to us as ecological entities. Looking out for #1 makes sense biologically - that's how natural selection works (although in some cases you have group cooperation for the propogation of the species as a whole...).

But one would hope that we're at least a little higher than the apes :)

Oh wait, he already did blog about it! It's at the intersection of biology and sociology: http://biolexeme.blogspot.com/2008/09/i-was-reading-blog-of-friend-of-mine.html

Anyway, a Christian could also challenge Rand on whether the materialism (and accompanying secularization) that we've seen is a net gain. Of course, you'd have to balance this with poverty alleviation, but I haven't heard libertarians mention this once. Unless of course we're supposed to be poor, then we can just laugh her off.

Craig Moore said...

I think capitalism and socialism ultimately have inherent weaknesses, fact is human beings are born sinners and by nature depraved. So both systems will end up corrupted. As far as individuals being too selfish to decide what to do with their wealth, who really thinks that a bunch of government bureacrats are more virtuous and qualified to decide?

This is the world we live in. Now the church has a different standard where honesty, charity and generosity are to be the guiding virtues, but in fact most believers fall short of these practices too. You can see it each week in the offering plate. Legislating the secular world to give up their hard earned money to others, when the church is so unwilling to even tithe will cause a lot of resentment and kill incentive in our society.

Our founding fathers mainly agree that a country like ours, based on individual rights and freedoms of interaction and commerce will only succeed if the citizens are virtuous people. We, in my humble opinion are not.

::athada:: said...

Craig (and all) -

It'd be encouraging to see more high profile wealthy Christians submit their wealth to local churc bodies (instead of gov't bureacrats OR their own greed). I read that Rich Mullins did this with his church elders and told them to pay him the average working man's wage - apparently he didn't even always know how much he was making. Talk about submission! But Rich was a big fan of St. Francis and few today understand that way of thinking in a thoroughly capitalist society and church.

Tom Lehman said...

Good and interesting comments all around. Most of you out there know I am a free-market economist who, by training, generally agrees with Rand's assumptions and conclusions both on positive and normative grounds (aside from her ardent atheism, of course). I would make one caveat, since Keith invited my comments. I think we should be very careful not to conflate Rand's vision of a pure free market "capitalism" with what we have or have had in the US economy in recent years. I think Rand would argue (and I would agree with her) that today's economic problems and financial crisis are the direct result of failing to pursue a purely "selfish" capitalism by having the government constantly intervene to influence markets, either through regulations or subsidies or transfers or through some other kind of influence (the Federal Reserve, CRA, Fannie, Freddie, Sarbanes-Oxley, etc.). We do not live in, nor have we lived in for a very long time, a "deregulated" free market economy of the sort Rand (and I) promote. Instead, we live in a mixed-market capitalist-corporatist economy ("crony capitalism" or "casino capitalism") where there is a very heavy dose of government intervention influencing people, for example, to take on debt and finance homes and real estate that they would never have chosen to own or even qualified to own under normal free-market conditions. Rand would definitely rebuke the "moochers" of today's political class by telling them that the current financial crisis mess is exactly what they deserve given the government's meddling in the markets over the past several decades. It is important, I think, not to confuse Rand's ideal with what we actually have, and to be sure to understand that the problems we have are not owing to Rand's vision of capitalism, but to our own, shall I say, bastardized version of it. Now, whether Rand's vision of a free market (and my own, for that matter) are actually possible to achieve (which is the next question on all of you minds, right?) is a separate question altogether. As Craig has said, no system is perfect, so each system will have weaknesses. The question is, which is the "least bad" system that conforms most fully to man's inherent or created nature. I'm with Rod, and most economists: it's got to be capitalism.

Keith Drury said...

ARTHUR B. LAFFER (Laffer curve guy) has a pointed article today in the Wall Street Journal that lines up with Tom Lehman's view:
"The Age of Prosperity Is Over"

Kevin Wright said...

If people are allowed to dream of a fully deregulated economic system, can I dream of one where greed is not the motivating force driving the vehicle? The Wesleyans out in California right now are fighting hard to outlaw gay marriage because of their theological beliefs. Why hasn't any Wesleyan district ever held a campaign against greed? Your post is revealing in that we truly do view selfishness as a virtue to be harnessed by all for the betterment of society. But now we're no better than Catholic proportionalist theologians who advocate for double effect (doing evil so that good may come). I'm not comfortable with any of this and yet I know that I too am complacent in a system that encourages me, no depends on me, to be greedy. So perhaps instead of being all giddy about our capitalistic system, we should participate in it mournfully, asking God to forgive us for not having more courage or creativity.

Kevin Wright said...

And let's not forget that free markets also encourage exploitation of labor forces and gigantic trusts that end up literally killing people in the name of the almighty dollar.

::athada:: said...

A quote... (Drury forgive me in advance if you don't do quotes here, delete it and I'll quit)

"For [Adam] Smith, the purpose of economics was a constantly expanding market, hence anything that would stimulate growth was welcome. In effect, this removed any notion of ethics or morality from economics and replaced it with the concept of an "invisible hand," which would guarantee that the good of the whole was insured if all people would pursue their own self-interest. In Christian theology, of course, the only 'invisible hand' is God's, and once we grasp it we discover that it leads away from self-interest to justice and compassion for the poor and oppressed."

-Richard Foster, Freedom of Simplicity

Foster wasn't an economist, and Rand ain't a theologian, so... where do we go from here?

Percival said...

Everyone who wants the classic Christian defense of capitalism needs to read "The Spirit of Democratic Capitalism" by Novak. It completely blew me away when I read it in 1984.

Percival said...

I also like this Christian blogger for a christian view of economics.
http://krusekronicle.typepad.com/

Chap said...

I think Thanksgiving and America's first failed experiment with "Christian socialism" is a good reminder of what economic system is most "just". This clip is taken from a Christian businessman http://www.businessreform.com/article.php?articleID=11584

"For the first two years of the settlement, the colonists labored under an economic system that they called, "The Common Course and Condition." This was a primitive and simple form of socialism. The family households commonly shared whatever products they could produce. If one family worked diligently, rising early, working hard until sundown, and produced a bumper crop, while his neighbor lay in bed until noon and produced little, they shared equally the sum of both. There was no incentive to work hard and apply one's God-given talents and abilities. This system produced consistent shortages. There was never enough food for everyone. It also produced squabbles among the colonists. There was resentment and envy—predictable results in socialist economies. Fortunately, the colonists had elected a young, but wise and godly governor for the colony—William Bradford. In 1623, Bradford recognized the failure the "Common Course." Bradford would later write that this failed economic system "was found to breed much confusion and discontent and retard much employment."

I think it's simplistic to label captitalism as a system based only on greed.

Burton Webb said...

Selfishness might be a virtue at the personal level, but it is probably a vice at the level of the whole system.

Adam - from the point of view of a mouse, being selfish with your cheese is the best way to stay alive. But individual mice live in communities of mice, so there is some benefit in sharing your cheese. You keep your mate alive and have pups.

But - there is a larger ecology out there. Somewhere an owl is busy laying her eggs, depending on the prolific mice to create dozens of ready-to-eat meals. What of the interaction between mouse and owl? What of the insects that the mice eat - or the hawks that prey on owls? What of the mold and bacteria that eventually get us all...

Selfishness may work in the short term for individuals but not in the long term for ecosystems. The ecology of the planet - the providence of God - demands certain checks and balances on self interest. We ALL live in relationship with the world around us.

Biologically what happens when one niche of the community is allowed to grow out of control (consumed by selfish interests)? There is a crash of the ecosystem. As the key nutrients are consumed by one overly-selfish population it adversely affects the entire system. Are we (humans) smart enough to self-restrict our consumption of resources, or will we throw the ecosystem out of balance? Is the pain of a crash significant enough for us to self-regulate? What will that regulation look like?

But then, am I talking about ecology or economy... maybe we do have something to learn from biology after all.

Outside-the-Beltway Drury said...

This week, I have found the article and most of the comments dissatisfying. There seems to be a lot of sinners out there--i.e. people missing the mark.

1) What is a free market?
There seems to be confusion over the term "free market." There seems to be a predominating notion that a pure free market lies at the end of some continuum of less and less regulation. This is completely inaccurate. A continuum of less and less regulation leads to anarchy. A free market, on the other hand is a regulated environment in which individuals are empowered to trade with one another in mutually advantageous ways. "Free" markets always require regulation and include all kinds of public and private regulation. In particular, "free" markets depend on a massive system of private regulation characterized by the freedom of contract. Free markets also need public regulation to ensure a free flow of information, free access to trading partners, and overall protection of the rights of contracting parties. What sets free markets apart is not a lack of regulation but the kind of regulation. Free markets require regulation that encourages and empowers the free flow of capital.

2) Are free markets uniquely suited for unfettered greed?

The short answer is no. Greed is at work in any economic system. the desire to control markets itself is often driven by greed. So whose greed do you want, a banker's greed or a congressman's greed. There are some qualities about free markets that seem to make them better. One of those is the free flow of capital. This allows individuals to make their own value judgments. In that sense it is reflective of a person's ethics--in fact it is really a surrogate of ethics. A free market allows value judgments based on greedy self-interest or, just as easily, altruistic love of neighbor. There is nothing uniquely selfish about operating within a free market. Free markets, in fact, allow for incredible acts of selflessness and foster unprecedented philanthropy.

Selfishness and greed are at work in any economic system--the choice is really whose selfishness and greed you want to predominate, Wall Street or Capitol Hill.

And what of Rand. Nothing. The Virtue of Selfishness is pop philosophy and a great pretext for sexual promiscuity--something Rand specialized in even into to her old age. Successful free markets do rise and fall on whether a person acts out of pure self-interest or pure selflessness.

Keith Drury said...

THANKS for the thoughtful comments...

My only regret is I did not make the final sentence more pronounced... for hat is the big question for the church

Let me repeat it here and post a comment myself---who knows maybe someone will come back later and pick up the thread I tried to "plant" in the column.

And, to flip the issue, how far can you take the libertarian approach to how we run the church—like the freedom of an individual member to vary from doctrine and lifestyle from centralized church government?

--How much does denominational "regulation" by rules and requirements restrict the church?

--how about local churches who go beyond denominational requirements and "require" tithing of members... in what ways does this "regulation" restrict a robust church?

--Is it a good thing for a local church to be "selfish" (or at least follow their self-interest" in matters--like paying denominational assessements or sending money to Africa? Are "low taxes best for the kingdom ?

--And how much should an individual christian act on self-interest as they relate to their local church... in their desire for worship styles that meets their needs, switching churches to one that provides better services meeting their needs...or should they suppress their self-interest for the sake of the whole and is that really better for the kingdom systemically?

I had hoped to prompt a bit more discussion on the church... that's the price I pay for being oblique when I flip a column at the end ;-)

Pastor Rod said...

Keith,

Yep, I missed that last line entirely.

Denominational control is about as effective as economic central planning. (How is the USSR doing on its current five-year plan?) Denominational concerns tend toward institutional preservation.

Too much denominational power carries the same danger as too much political power. Even sanctified humans are still human.

Just as parents make a fatal mistake when they act as if their children belong to them, so also denominations go wrong when they try to control “their” congregations. They must remember that the individual churches belong to the kingdom, which is definitely not coterminous with the denomination.

Besides, the whole regulation mindset is all wrong in the church. The church needs to take a strong stand regarding essential values. But dictating the specific ways those values play out is often a big mistake.

Lesslie Newbigin addresses this danger in a cross-cultural context:
The place where the virus of legalism gets into the work of evangelism is the place where the evangelist presumes that he or she knows in advance and can tell the potential convert what the ethic content of conversion will be.
The Open Secret, p. 136

The irony is that dictating the practical expression of conversion usually results in less rigorous discipleship than does encouraging the converts to obey the Great Commandment under the direction of the Holy Spirit.

Of course, there are times when the church needs to stand “as one” regarding social issues, but that is best done without legislation or regulation.

Newbigin has another observation regarding the “autonomy” of the local church:
The local congregation is not a branch of the universal Church, but it is the place where the universal Church is made visible. When the local congregation speaks and acts, its words and acts must claim to be the words and acts of the universal Church if they are to be authentic.
Truth to Tell, p. 88

The whole idea of “self interest” is antithetical to the kingdom, whether the self interest of the congregation or the self interest of the denomination.

I would argue that neither the “regulatory” approach nor the “libertarian” approach is appropriate in the church. To frame the issue this way misses the real point. There is one Church. But it is not maintained by human regulation and control.

When a denomination (or a congregation) acts as if it has the freedom to function as an independent division of the Universal Church, it denies the true nature of the Church.

I hope you are able to make sense out of my ramblings here. This is a complex issue and difficult to explain in a short comment on a blog post.

Rod