Virtuous Capitalism

by Jerry O’Driscoll 

Over at the Austrian Economists, Steve Horowitz has posted a challenging statement and asked for reactions: “The great virtue of the free market is that it requires so little virtue to work effectively.”  The thrust of the responses is that defenders of free markets have had little to say about virtue (at least since Adam Smith).  

In a brilliant paper for APEE a few years ago, Liberty Fund’s Doug den Uyl asked whether we need ethics if we have free markets. That is a broader question, but on point.  Do markets discipline transactors to act virtuously and ethically?  Many would be tempted to answer affirmatively, but that would be facile. (Doug is not facile.)  

Economic Development in Honduras

by Jerry O’Driscoll  

The imbroglio in Honduras is political and constitutional, but also economic.  The underlying economic issue is what development model will be followed: that of the caudillo with its populist redistribution, or a free-market model. 

The most solid reporting on the crisis as been done by Wall Street Journal columnist Mary Anastasia O’Grady.  She has clarified that the ouster of former President Zelaya was ordered by the Honduran Supreme Court in response to his attempted coup.  Last week she traveled to Tegucigalpa and interviewed the Cardinal, who was drawn into the controversy.  The Cardinal is a well-known advocate for the poor.  So on what side did he come down?

The High Line Park: Turnstyles Anyone?

by Bill Butos

The recently opened High Line Park in the hip Chelsea area on New York’s West Side is all the rage.  The High Line sits on a stretch of a defunct elevated freight railway along 10^thAvenue from Ganesvoort St. (which is just south of 14^th St.) to 20^th street.  The City plans to extend it to 34^th St.   A green urban advocacy group, Friends of the High Line, has steered this part of the project to completion.  It’s become a tourist destination and a favorite platform for celebs and fashionistas.  And it fits perfectly into the nearby Meatpacking and Chelsea areas with their trendy eateries, late night clubs, and designer clothes shops.  By all accounts it purports to represent the future of urban eco-friendly planning and judging by the number of visitors (about 20,000 per week), it’s a grand success.  (See here and a video appreciation by supporters here.)

After my second walk-through, my appreciation turned slightly positive.  It is fun walking above the streets and catching new perspectives of the City from 30 feet above.  But the empty-lot weeds masquerading as (carefully maintained) indigenous flora still look ugly and many of the views are rather uninspiring.  And I am also a taxpayer.

Neither Charity Nor Truth, Part 3: The Attack on Classical Liberalism

by Mario Rizzo  

In this final installment of my analysis of the papal encyclical letter Caritas in Veritate I turn my attention to Benedict XVI’s positive ideas on globalization.  (I put the encyclical section numbers in parentheses.)  

Do not expect clear-cut statements or precise recommendations for policy. Do not even expect consistency. (There are actually some good parts as in Sections 57 and 58.)  

The encyclical bears the mark of a committee’s work, presumably approved by the pope. There are individual sections that stress different, and contrary, attitudes so it is difficult to come away with a clear picture. Anyone looking for real guidance will have to seek it elsewhere.  

Nevertheless, a certain grand vision is revealed about society. The pope seems to be an enemy of the idea of beneficial spontaneous ordering forces.

Neither Truth Nor Charity, Part 2: Globalization and the Pope’s Discontents

by Mario Rizzo  

Throughout Pope Benedict XVI’s enclyclical (“Caritas in Veritate”) he stresses that scientific knowledge is not enough when trying to determine appropriate government policies or even individual actions. This is quite true.  

He fails, however, to appreciate in many specific instances and arguments the importance of the fact that that moral or ethical knowledge is also insufficient to determine appropriate government policy or individual actions. He pays lip service to this idea (Sec. 9, 30) but it rarely constrains him in practice, as we shall see. 

Now consider a specific issue.  

The pope is worried about the effect of globalization on the traditional welfare state. (Sec. 25)

Neither Truth Nor Charity: The Destructive Influence of a Papal Encyclical

by Mario Rizzo  

Recently Pope Benedict XVI issued a papal letter (“encyclical”) called “Caritas in Veritate” [CV] or “Charity in Truth” which is largely about economic issues relating to globalization. While there have been some commentaries on it, two prominent ones (here and here) in the Wall Street Journal do not reveal how truly bad it is. It may be that the pressures of journalism are such that people read such documents too quickly. I am being charitable.  

Two interesting models of urban redevelopment

by Sandy Ikeda

From the New York Times, “An Effort to Save Flint, Mich., by Shrinking It”:

Instead of waiting for houses to become abandoned and then pulling them down, local leaders are talking about demolishing entire blocks and even whole neighborhoods. The population would be condensed into a few viable areas. So would stores and services. A city built to manufacture cars would be returned in large measure to the forest primeval.

After Katrina, some urbanists urged New Orleans authorities to adopt something like this policy of “planed shrinkage,” but largely for political reasons it was summarily rejected.

Given New Orleans’s cultural heritage, perhaps they might also find Cleveland’s approach useful, as reported in The Wall Street Journal, “Artists v. Blight”:

The mirage of the efficient city

by Sandy Ikeda

I’m honored to be contributing a short essay to a Festschrift for Jane Jacobs.  Recently, the editor asked me to write an abstract.  The following is the result, which I would like to share with you:

A city is not a man-made thing.  Rather, it emerges from the actions of its inhabitants, who interact in unpredictable yet orderly ways.  Under the right conditions – the right “rules of the game” – what arises is vital, creative, radically unpredictable, and profitable:  the living city.

Infrastructure: How the seen crowds out the unseen

by Sandy Ikeda

So far I’ve come across no discussion of the consequences that the massive infrastructure spending touted in Stimulus Package I (there will of course be others) will have on what Nathan Glazer called “the fine structure of society” in the local communities it will impact.

A new freeway, for example, might make it possible to get from point A to point B faster, but it can also reduce the local economies of A and B, as well as those in between, to barren border vacuums. Note that this is apart from whether they will be built in a timely manner or if the measured economic benefits they generate somehow cover their construction costs.

Because nearly all of the debate has taken place within a macroeconomic framework, most public intellectuals seem to have neglected how such a massive and rapid increase in physical-infrastructure might undermine this fine structure. Some have mentioned the “bridge to nowhere” syndrome or questioned whether the stimulus spending will actually stimulate quickly enough. And a few, like my colleague Mario Rizzo, have brought up the important resource-allocation effects. But I’m talking about something different here.

Zimbabwe’s About Turn

By Chidem Kurdas

In developed counties free markets are widely blamed for economic ills as governments take over banks and pundits favor nationalization. By a sad irony, the situation in Zimbabwe is so dire that even President Robert Mugabe appears to be making a concession toward the only way out—reestablishing free markets.