12 November 2013

He Said It: Coolidge

"It is something far more important than a sordid desire for gain. It could not succeed on that basis. It is dominated by a more worthy impulse; it rests on a higher law. True business represents the mutual organized effort of society to minister to the economic requirements of civilization. It is an effort by which men provide for the material needs of each other. While it is not an end in itself, it is the important means for the attainment of a supreme end. It rests squarely on the law of service. It has for its main reliance truth and faith and justice. In its larger sense it is one of the greatest contributing forces to the moral and spiritual advancement of the race."

--President Calvin Coolidge, "Government and Business," Address before the Chamber of Commerce of the State of New York, New York City, November 19, 1925

19 August 2013

Breaking News: Otteson Headed to Wake Forest

Dear Friends, Students, and Colleagues:

I have accepted a new position and will be leaving Yeshiva University. As of September 1, 2013, I will be the executive director of the BB&T Center for the Study of Capitalism at Wake Forest University.

This is a tremendous opportunity for me. The Center is beginning its sixth year of existence, having been funded by continuing support from the BB&T Foundation. The Center's mission is to encourage the study of capitalism in all its facets, and, more generally, to explore the institutions that enable human flourishing. We want to know how a society of free and responsible persons can live together peacefully, and we want to examine the political, economic, moral, and cultural institutions that encourage prosperity and humanity. 

Wake Forest's motto is "Pro Humanitate," which is usually translated as "for humanity." But the Latin word humanitas is much broader, and deeper, than what the English word "humanity" usually means today. It indicates not only human beings, but humane life. It denotes a distinctly human virtue whereby people treat each other with the respect, dignity, and compassion that humanity requires. In this way, "Pro Humanitate" means something like: "in the service of promoting a fully humane life for all." That captures perfectly the mission of the Center for the Study of Capitalism. 

I emphasize that the Center's name is "Center for the Study of Capitalism," not the "Center for Capitalism." That is a small but momentous distinction. We are interested in figuring out what these prosperity-enabling institutions are, and promoting them, whatever they are. Our investigations will thus be nonideological and nonpartisan. Capitalism has been a source of tremendous, even unprecedented, prosperity; like all human institutions, however, it is not perfect. We will want to examine it disinterestedly, understanding and exposing both the good and the bad, and then promoting the former and discouraging the latter. In other words, the Center's work will be not only rigorous but serious. There is too much at stake to take any other stance.

For those of you who know me or my work, you will recognize that these are my own central scholarly and intellectual concerns. So this position is a great fit. 

We also hope to create a true intellectual community comprised of people from various disciplines and perspectives who are united in their commitment to the spirit of the Center's enterprise. If you are a person who shares our sense of purpose, and might like to associate with us somehow, donate to us, or just keep abreast of our activities, please reach out to me and let me know.

As excited as I am to begin this new chapter of my career, I must also admit to some sadness to be leaving Yeshiva University. Before all else, I will miss my students. As I have had occasion to say to many people in many forums, the students at Yeshiva are outstanding--unlike any others I have encountered elsewhere. Their seriousness of purpose, their intelligence and diligence, and their genuine interest in ideas, all combined with a typically light, even humorous disposition, have made them a delight to work with. Every day I have learned something new from them, and every class I taught they kept me on my toes. 

To my students: It has been my honor and my privilege to work with you, and to make whatever meager contribution I could to your development. You have demanded the very best from me, and I have willingly given it; but you have given me your best in return, which has made everything more than worthwhile. A professor could ask for no more from his students. I thank you for what you have given me.

James R. Otteson


11 July 2013

He Said It: Zemyatin

"It is an error to divide people into the living and the dead: there are people who are dead-alive, and people who are alive-alive. The dead-alive also write, walk, speak, act. But they make no mistakes; only machines make no mistakes, and they produce only dead things. The alive-alive are constantly in error, in search, in questions, in torment." 

--Yevgeny Zemyatin, "On Literature, Revolution, Entropy, and Other Matters" (1923), quoted in the "Introduction" to Zemyatin's 1920/21 novel We (New York: Modern Library, 2006), p. xi.

24 June 2013

He Said It: McChesney

"Even if politicians eventually allow themselves to be bought off, their minatory presence reduces the expected value of entrepreneurial ability and specific-capital investments. The possibility that government may reduce returns to their capital unless paid off reduces firms' incentives to invest in the first place. It also induces inefficient shifts to investment in more mobile or salvageable (that is, less firm specific) forms of capital as insurance against expropriation. In either event, the allocative losses from politicans' ability to extract the returns from private capital are measured by investments that are never made in the industry threatened."

--Fred S. McChesney, "Rent Extraction and Rent Creation in the Economic Theory of Regulation," The Journal of Legal Studies 16, 1 (January 1987): 101-118. 

[Editorial comment: Frédéric Bastiat, call your office!]

14 June 2013

A Philosopher's Objections to NSA Surveillance

I appeared on the Wall Street Journal's "OpinionLive" yesterday. Its excellent host Mary Kissel, who is a member of the editorial board of the WSJ, interviewed me about my objections to recent revelations about the NSA surveillance of American Citizens:


[One note of self-criticism: At the 2:23 mark, I misspoke: I refer to the "Virginia Articles of Confederation," when I meant to say the "Virginia Declaration of Rights."]

31 May 2013

Now Available in Paperback!

My book Adam Smith, which was first published by Continuum in 2011 as part of John Meadowcroft's "Major Conservative and Libertarian Thinkers" series, is finally coming out in paperback. It is slated to appear on August 1st, and will be brought out by Bloomsbury Publishing, which bought the rights. (Here's a linkif you would like to pre-order it.)

The book gives an overview of Smith's life and works, and it offers an assessment of what Smith got wrong and what he got right. (Spoiler: It turns out there is a lot more of the latter than the former.) The book includes a bibliography, and it closes with a discussion of whether Smith is in fact "conservative" or "libertarian"--or something else entirely. 

It is intended for the educated lay person, and our hope is that professors will use it as a complementary text in courses that discuss Smith. I hope you will have a look.

P.S. What do you think of the cover? 

17 May 2013

He Said It: Williamson

Kevin D. Williamson
"Take, for example, the problem of designing a national health-care system. Washington is packed to the gills with people who believe that they have the ability to design an intelligent national health-care system, but there is not one who does—no Democrat, no Republican, no independent. The information burden is just too vast. Imagine a radically simplified health-care system, one in which any medical problem could be treated by taking one of fifty pills, but you can have only one pill a month, so you have to prioritize. That presents each individual with 58,150,627,116,341,760,000 options (that's '58 quintillion')--the number of ways to rank 12 choices out of 50 options--and political managers would have to do so for every American. Since there are 300 million Americans, we have to do a calculation for each one, meaning that we have to consider 1.74 x 1028 options, one of those numbers so large we don't have a common name for it. And since we'll assume that people's needs will change over time (an eighteen-year-old doesn't have the same health-care needs as an eighty-one-year-old), we'll want to review everybody's plan once a year. As they say in the political speeches, we're going to consider all of our options and take all of the information into account.

"Except we pretty obviously aren't.

"[...E]ven at the rate of one scenario per second we're in big trouble, since the number of seconds that have passed since the beginning of the universe (dated from the Big Bang, some 14 billion years ago) is a lot less than the number of possibilities we have to consider, only 4.42 x 1017 seconds in total. Put in perspective, the number of options to be examined in our ridiculously simplified system is 30 billion times the number of seconds that have passed since the beginning of time."

08 May 2013

He Said It: Mackey

"[B]usiness is not inherently flawed and sinful or in need of redemption. Business is fundamentally about people working together cooperatively to create value for other people. It is the greatest creator of value in the world. This is what makes business ethical and what makes it beautiful. It is fundamentally good. It becomes even better when it is more fully conscious of its inherent higher purposes and extraordinary potential for value creation."

--John Mackey and Raj Sisodia, Conscious Capitalism: Liberating the Heroic Spirit of Business(Harvard Business Press, 2013), p. 263.

07 May 2013

The 2012-'13 Academic Year in Review: Talks and Lectures

The end of the academic term means that it is time for professors to supply their employers with an accounting of what they did during the previous year. 2012-13 being no different, I thought I might supply here a list of my highlights. 

In this post, the talks and lectures I gave, in chronological order:

1. "Do Markets and Morality Mix? An Introduction to Moral Philosophy," the University of Rochester, September 2012.

2. "Wealth and Modern Democracy," a series of five lectures delivered at the Tikvah Post-BA Fellowship Program, New York City, October 2012.

3. "Adam Smith on Justice and Social Justice," Dartmouth College, October 2012.

4. "The 'Adam Smith Problem': Can Economics and Morality Mix?" Trinity College, Hartford, Connecticut, November 2012. 

5. "A Conversation on the Morality of Capitalism" (with Ron Sider) Eastern University, January 2013.

6. "The Morality of Capitalism" (panel discussant), the Manhattan Institute, New York, February 2013.

7. "Adam Smith and Social Justice," Loyola University of Baltimore, February 2013.

8. "Justice, Social Justice, and Adam Smith" and "Rethinking Capitalism and Equality," the McConnell Center, University of Louisville, March 2013. (Here is a link to the video of this talk.)

9. "Adam Smith, Justice, and Social Justice," the University of Arizona, March 2013.

10. "Adam Smith on Justice and Social Justice," University of North Carolina-Greensboro, April 2013.

As you can see, my talks reflect themes I am most interested in, especially at the moment: Adam Smith, the morality of capitalism, and some arguments I am exploring in the book I am working on, The End of Socialism.

In separate posts, I will give some highlights of other activities, like courses I taught, things I wrote, and conferences I attended. I will also post my plans for the summer (hint: finish writing my book and the article I have promised, but am late with, for Princeton University Press and Ryan Hanley). 

25 April 2013

He Said It: Coase

"The question remains: how is it that these great men [viz., J.S. Mill, Henry Sidgwick, A.C. Pigou, and Paul Samuelson] have, in their economic writings, been led to make statements about lighthouses which are misleading as to the facts, and which, to the extent that they imply a policy conclusion, are very likely to be wrong? The explanation is that these references by economists to lighthouses are not the result of their having made a study of lighthouses or having read a detailed study by some other economist. Despite the extensive use of the lighthouse example in the literature, no economist, to my knowledge, has ever made a comprehensive study of lighthouse finance and administration. The lighthouse is simply plucked out of the air to serve as an illustration. The purpose of the lighthouse example is to provide 'corroborative detail, intended to give artistic verisimilitude to an otherwise bald and unconvincing narrative' [William S. Gilbert, 'The Mikado']. 

"This seems to me the wrong approach."

--Ronald H. Coase, "The Lighthouse in Economics," Journal of Law and Economics 17, 2 (October 1974), pp. 374-5.

24 April 2013

He Said It: Coase

"The government is, in a sense, a super-firm (but of a very special kind) since it is able to influence the use of the factors of production by administrative decision. But the ordinary firm is subject to checks in its operations by the competition of other firms, which might administer the same activities at lower cost and also because there is always the alternative of market transactions as against organisation within the firm if the administrative costs become too great. The government is able, if it wishes, to avoid the market altogether, which a firm can never do. The firm has to make market agreements with the owners of the factors of production that it uses. Just as the government can conscript or seize property, so it can decree that factors of production should only be used in such-and-such a way. Such authoritarian methods save a lot of trouble (for those doing the organising). Furthermore, the government has at its disposal the police and the other law enforcement officials to make sure that its regulations are carried out.

"It is clear that the government has powers which might enable it to get some things done at a lower cost than could a private organisation (or at any rate one without special governmental powers). But the governmental administrative machine is not itself costless. It can, in fact, on occasion be extremely costly. Furthermore, there is no reason to suppose that the restrictive and zoning regulations, made by a fallible administration subject to political pressure and operating without any competitive check, will necessarily always be those which increase the efficiency with which the economic system operates. Furthermore, such general regulations which must apply to a wide variety of cases will be enforced in some cases in which they are clearly inappropriate. From these considerations it follows that direct governmental regulation will not necessarily give better results than leaving the problem to be solved by the market or the firm. But equally there is no reason why, on occasion, such governmental administrative regulation should not lead to an improvement in economic efficiency. This would seem particularly likely when, as is normally the case with the smoke nuisance, a large number of people are involved and in which therefore the costs of handling the problem through the market or the firm may be high.

"There is, of course, a further alternative, which is to do nothing about the problem at all. And given that the costs involved in solving the problem of regulations issued by the governmental administrative machine will often be heavy (particularly if the costs are interpreted to include all the consequences which follow from the Government engaging in this kind of activity), it will no doubt be commonly the case that the gain which would come from regulating the actions which give rise to the harmful effects will be less than the costs involved in Government Regulation."

--Ronald H. Coase, "The Problem of Social Cost," Journal of Law and Economics 3 (October 1960), pp. 17-18.

23 April 2013

He Said It: Kierkegaard

"If a human being did not have an eternal consciousness, if underlying everything there were only a wild, fermenting power that writhing in the dark passions produced everything, be it significant or insignificant, if a vast, never appeased emptiness hid beneath everything, what would life be then but despair? If such were the situation, if there were no sacred bond that knit humankind together, if one generation emerged after another like forest foliage, if one generation succeeded another like the singing of the birds in the forest, if a generation passed through the world as a ship through the sea, as wind through the desert, an unthinking and unproductive performance, if an eternal oblivion, perpetually hungry, lurked for its prey and there were no power strong enough to wrench that away from it--how empty and devoid of consolation life would be! But precisely for that reason it is not so, and just as God created man and woman, so He created the hero and the poet or orator." 

--Johannes de Silentio (a.k.a. Søren Kierkegaard), "Eulogy on Abraham," from Fear and Trembling (1843)

He Said It: Coase

"It is perhaps the main achievement of economic science that it has shown that there is no reason to suppose that specialisation must lead to chaos." 

--Ronald H. Coase, "The Nature of the Firm," Economica 4, 16 (November 1937), p. 398

15 April 2013

He Said It: David Hume

"It seems, then, that nature has pointed out a mixed kind of life as most suitable to human race, and secretly admonished them to allow none of those biasses to draw too much, so as to incapacitate them for other occupations and entertainments. Indulge your passion for science, says she, but let your science be human, and such as may have a direct reference to action and society. Abstruse thought and profound researches I prohibit, and will severely punish, by the pensive melancholy which they introduce, by the endless uncertainty in which they involve you, and by the cold reception which your pretended discoveries shall meet with, when communicated. Be a philosopher; but amidst all your philosophy, be still a man."

--David Hume (1711-76), Enquiry Concerning Human Understanding (1748), section 1

09 April 2013

He Said It: Buchanan


"The scholarly field of economics as practiced and promulgated in this century has done its share of damage. Rather than allow the study of economics to offer genuine intellectual adventure and excitement, we have converted it into a complex mathematical and empirical science. This trend was only partially offset during the decades of the Cold War, when the continuing challenge of fighting communism offered motivation to liberals such as Hayek and a relatively small number of his peers. But since then, the discipline has become piddling puzzle solving. How can we make economics come alive again, especially for those who will never be professionally trained economists?"


--James M. Buchanan (1919-2013), "Saving the Soul of Classical Liberalism" (from the Wall Street Journal, January 1, 2000)

20 February 2013

He Said It: Percy

"In a word, thanks to the Jews, one can emerge from the enchanted mists of the mythical past, the Roman and Arthurian and Confederate past, lovely as it is. For, whatever else the Jews are, they are not mythical. Myths are stories which did not happen. But the Jews were there then and are here now.

"Semitic? Semiotic? Jews and the science of signs? Yes, because in this age of the lost self, lost in the desert of theory and consumption, nothing of significance remains but signs. And only two signs are of significance in a world where all theoretical cats are gray. One is oneself and the other is the Jews. But for the self that finds itself lost in the desert of theory and consumption, there is nothing to do but set out as a pilgrim in the desert in search of a sign. In this desert, that of theory and consumption, there remains only one sign, the Jews. By 'the Jews' I mean not only Israel, the exclusive power of God, but the worldwide ecclesia instituted by one of them, God-become-man, a Jew."

--Walker Percy, "Why Are You Catholic?" (1990)

12 February 2013

He Said It: Pope (The English Poet, Not the Supreme Pontiff)

"Know then thyself, presume not God to scan,
The proper study of mankind is man.
Placed on this isthmus of a middle state,
A being darkly wise, and rudely great:
With too much knowledge for the sceptic side,
With too much weakness for the stoic's pride,
He hangs between; in doubt to act, or rest;
In doubt to deem himself a god, or beast;
In doubt his mind or body to prefer;
Born but to die, and reasoning but to err; 
Alike in ignorance, his reason such,
Whether he thinks too little, or too much:
Chaos of Thought and Passion, all confused;
Still by himself abused or disabused;
Created half to rise, and half to fall;
Great lord of all things, yet a prey to all;
Sole judge of truth, in endless error hurl'd:
The glory, jest, and riddle of the world!"

--Alexander Pope (1688-1744), Essay on Man, Epistle II (1734)

05 February 2013

They Said It: Schwab and Ostrom

"Finally, it is worth noting that institutions--even well-designed ones--will not lead to beneficial outcomes by themselves. Institutions are inseparable from the people who make use of them, and, as noted above, all rules are subject to manipulation by political actors. Thus, at some point, we must cease to rely upon institutional corrections and place our faith in a citizenry well educated in virtue. Ultimately, we must be the guardians."

--David Schwab and Elinor Ostrom, "The Vital Role of Norms and Rules in Maintaining Open Public and Private Economies," in Moral Markets: The Critical Role of Values in the Economy, Paul J. Zak, ed. (Princeton, 2008), 233; italics in the original.

29 January 2013

He Said It: Buchanan

"The European classical liberal, who is well represented by [F. A.] Hayek, can and perhaps should stress the evolutionary sources of many of the institutions that stand as bulwarks of individual freedom. The American cannot, and should not, neglect the fact that his own heritage of freedom, although owing much to its European antecedents, was deliberately 'constructed' in large part by James Madison and his compatriots. Theirs were no invisible hands."

--James M. Buchanan (1919-2013), "Law and the Invisible Hand" (1976), contained in The Collected Works of James M. Buchanan, vol. 17, Moral Science and Moral Order (Liberty Fund, 2001), 109.

28 January 2013

He Said It: Keynes

"The political problem of mankind is to combine three things: Economic Efficiency, Social Justice, and Individual Liberty. The first needs criticism, precaution, and technical knowledge; the second, an unselfish and enthusiastic spirit which loves the ordinary man; the third, tolerance, breadth, appreciation of the excellencies of variety, and independence, which prefers, above everything, to give unhindered opportunity to the exceptional and to the aspiring. The second ingredient is the best possession of the great party of the Proletariat [i.e., Labour]. But the first and third require the qualities of the [Liberal] party which, by its traditions and ancient sympathies, has been the home of Economic Individualism and Social Liberty." 

--John Maynard Keynes, "Liberalism and Labour" (1926)

22 January 2013

He Said It: Collingwood

"Yet these utopian dreams, these rebellions against the sordid aims of the economic life, against the worship of gain and the acquiescence in a competitive system, are not wholly to be condemned. They are both foolish and vicious if they proceed from a desire to enjoy wealth without winning it in the open market. If people who cannot get as high a price as they want for their goods or labor complain that only a ruthless competitive system prevents them from getting more, they are merely throwing a cloak of hypocritical moralizing over their own disappointed greed. The competitive system of which they complain is just the fact that they, and people like them, want all they can get. But the economic life is not everything; and it is right to protest against the assumption that buying cheap and selling dear make up the whole duty of man. Indeed, a renunciation of purely economic aims is the essence, negatively defined, of the moral life." 

--R. G. Collingwood, "Economics as a Philosophical Science," International Journal of Ethics 36, 2 (January 1926): 162-185

21 January 2013

He Said It: John Gray

"The same myth--a hollowed-out version of a religious belief in providence--underpins the abiding appeal of Communism. One of the features that distinguished Bolshevism from Tsarism was the insistence of Lenin and his followers on the need for a complete overhaul of society. Old-fashioned despots may modernize in piecemeal fashion if doing so seems necessary to maintain their power, but they do not aim at remaking society on a new model, still less at fashioning a new type of humanity. Communist regimes engaged in mass killing in order to achieve these transformations, and paradoxically it is this essentially totalitarian ambition that has appealed to liberals. Here as elsewhere, the commonplace distinction between utopianism and meliorism is less than fundamental. In its predominant forms, liberalism has been in recent times a version of the religion of humanity, and with rare exceptions--[Bertrand] Russell is one of the few that come to mind--liberals have seen the Communist experiment as a hyperbolic expression of their own project of improvement; if the experiment failed, its casualties were incurred for the sake of a progressive cause. To think otherwise--to admit the possibility that the millions who were judged to be less than fully human suffered and died for nothing--would be to question the idea that history is a story of continuing human advance, which for liberals today is an article of faith. That is why, despite all evidence to the contrary, so many of them continue to deny Communism’s clear affinities with Fascism. Blindness to the true nature of Communism is an inability to accept that radical evil can come from the pursuit of progress." 

--John Gray, "Communism, Fascism and liberals now," Times Literary Supplement, 2 January 2013

15 January 2013

Unique Opportunity: The Tikvah Fellowship

The Jerusalem Post recently ran a lengthy feature article on the Tikvah Fellowship, a New York-based program for which I have served as a lecturer. The Fellowship is a year-long educational program designed, in its own words, "for exceptional individuals interested in the political, religious, and intellectual future of the Jewish people." The Post called the fellowship the "boot camp of Jewish learning," and, as someone who has worked with the program, I can tell you it is that and a whole lot more.

A project of the Tikvah Fund, the Tikvah Fellowship provides its "Fellows" with a paid (!) opportunity to:

(1) Study the great ideas of classical and Jewish thought in areas such as economics, love and family life, and war and morality;
(2) Advance a project related to Jewish life and/or Israeli society;
(3) Learn with an international class of fellow participants; and
(4) Meet and work with leading thinkers and practitioners in the fields of Jewish thought and history, Israeli and American politics, religious leadership, journalism, economics, education, and community life.

The roster of faculty members is quite impressive; this year it includes people like William Kristol, Victor Davis Hanson, James Capretta, Ryan Hanley, Russ Roberts, Yuval Levin, Ruth Wisse, and Michael Walzer. Courses offered in the past have included "Religion and State in Modern Democracy," "War, Morality, and Statesmanship," "Political Foundings," and "Wealth and Modern Democracy." The course I taught last year was called "Economics and the Human Good." 

But this program is much more than merely another year spent taking courses. It is really the creation of an intellectual community. The program Fellows are themselves an extraordinary group of people. They are all impressively accomplished, but from an array of perspectives, experiences, disciplines, and places. (Several students of mine from Yeshiva University have been current and past Fellows.) They share office space in midtown Manhattan, take meals together, start reading groups, hatch ideas for scholarly projects, create partnerships for charities or businesses, and on and on. Because it takes place in New York and is supported by the Tikvah Fund, it has considerable resources at its disposal--and the Fellows exploit those resources. I remain in contact with many of the Fellows who have taken my classes or attended my lectures, and they have gone on to do impressive things indeed. 

I know of no other educational program doing anything quite like what the Tikvah Fellowship does. I wish it had been in existence when I was a student! 

The 2013-14 Fellowship Program is accepting applications through January 31. That's only a couple weeks away, so if you or someone you know might be interested in submitting an application, you will have to act quickly. See www.tikvahfellowship.org for further details on courses, work projects, compensation, eligibility, and instructions on how to apply.