Profit from an Islamic perspectives: Catholic Response to Zubair Hasan

This snowy weekend I was reading essays on profit when I stumbled upon Zubair Hasan’s Theory of profit from Islamic perspective.

It is a quick informative read that finished with a conclusion I do not agree with.

“In sum, for formulating an integrated operational profit theory let profit be defined as a
surplus over cost, the firm not the entrepreneur be made the focal point of its study, all
rudiments of dynamic change be regarded as its source, and scheme for its sharing
between capital and labor be devised to promote equity, growth, and peace in society.
Such a profit theory will impart realism to economics: both mainstream and Islamic”

My main disagreement with his conclusion is “let profit be defined as a surplus over cost”.

The late Spanish Scholastics had reached a different conclusion. Namely Saravia de la Calle, who said, “If we had to consider labor and risk in order to assess the just price no merchants would ever suffer a loss nor would abundance or scarcity of goods and money enter into the question.”

For Hasan’s search for a real definition of profit, he wanted numbers that could be measured. Yet by turning to “surplus over cost”, Hasan had prescribed the downfall to his theory of profit. For de la Calle correctly points out that “otherwise we would never find a case where merchants justly lose; they would always win.”

For de la Calle and other Scholastics, my source is Faith and Liberty: The Economic Thought of the Late Scholastics by Alejandro Chafuen.

Political Economy of Harry Potter: Ministry of Magic

The 2000’s have been a decade of Harry Potter. Although the series has finished, the story continues through the movies, and the love for the story spreads. Interestingly enough, a main theme through out the series has been the error in the Ministry of Magic who continuously undermine one of the most powerful greatest Wizard of all time.

The lesson? Government failure and their disillusion that they have the correct solution over the experts. Does real life need a villain in order for any fan of Harry Potter to see the errors of a strong central government which believes it knows better than the specialists?

Within the Potter world, could many events have been avoided if the Ministry of Magic had only listened to Harry Potter and Dumbledore?

Within the real world, could the events of the economic collapse been avoided if the government had corrected their policies according to what most economists viewed as the correct policy?

My last question is, why aren’t Harry Potter fans skeptical about government intervention?

Raising a child: Immediate solutions vs long term costs

After having a child, many people will come to you with advice. One of the main ones I have continued to hear is to not let your child get used to sleeping with you in your bed.
Yes, it maybe a solution to you finding some rest, but the some rest today, maybe the future loss of rest in the future when the child at an older age still feels comfortable sleeping in bed with his parents.

Now this parental wisdom makes complete sense. Why does it seem to be forgotten when addressing other issues such as bailouts and healthcare? Yes, bailing someone out may help them in the immediate future, but in the long run, will it not assist them to pick up on bad practices such as expecting to be bailed out again for poor judgment? Not being able to sleep unless in the parents bed isn't frowned upon by society if it were a child, but if a grown man were to do it, we'd think there is something wrong with him. Is this not what we are creating, incentives that entice grown men to feel the need to crawl in bed with their parents because they can't sleep?

Parental wisdom says it is best to listen to their cries holding the child or soothing him in order to put him back into his own bed so that he can make it through the night on his own. It is hard work as the easy solution of putting the child in your bed is only a decision away, but in the future it appears, you'll be glad you did only listen and help soothe the child by simply rocking them and supporting them.

Rocky and Economics

I have been stating that the Rocky series are some of the best films ever.
There have been books written about the economics and philosophies behind The Lord of the Rings, Matrix, and Star Wars series. Why has Rocky not made the list??

Rocky on comparative advantage:

                Yeah -- My ol' man who was
 never the sharpest told me --
 I weren't born with much brain
 so I better use my body.

   ROCKY
  (continuing)
 What's funny?

   ADRIAN
 My mother told me just the
 opposite.  She said, 'You
 weren't born with much of a
 body so you'd better develop
 your brain.'

Rocky on self interest and regulation:
Rocky Balboa:
Yo, don't I got some rights?
Boxing Commissioner:
What rights do you think you're referring to?
Rocky Balboa:
Rights, like in that official piece of paper they wrote down the street there?
Boxing Commissioner:
That's the Bill of Rights.
Rocky Balboa:
Yeah, yeah. Bill of Rights. Don't it say something about going after what makes you happy?
Boxing Commissioner:
No, that's the pursuit of happiness. But what's your point
Rocky Balboa:
My point is I'm pursuing something and nobody looks too happy about it.
Boxing Commissioner:
But... we're just looking out for your interests.
Rocky Balboa:
I appreciate that, but maybe you're looking out for your interests just a
little bit more. I mean you shouldn't be asking people to come down
here and pay the freight on something they paid, it still ain't good
enough, I mean you think that's right? I mean maybe you're doing your
job but why you gotta stop me from doing mine? Cause if you're willing
to go through all the battling you got to go through to get where you
want to get, who's got the right to stop you? I mean maybe some of you
guys got something you never finished, something you really want to do,
something you never said to someone, something... and you're told no,
even after you paid your dues? Who's got the right to tell you that,
who? Nobody! It's your right to listen to your gut, it ain't nobody's
right to say no after you earned the right to be where you want to be
and do what you want to do!... You know, the older I get the more
things I gotta leave behind, that's life. The only thing I'm asking you
guys to leave on the table... is what's right.
Perhaps this will become a regular theme, economics from Rocky.

Capitalism and Death Challenge

There have been many comments in recent threads across the net (such as this one) stating that to find the problem with abortion, embryonic stem cell research, euthanasia, etc one must simply follow the trail of money.

Let me first define money in economical terms.
Money is a

• Good
• Medium of Exchange
• Standard of Value
• Store of Value

Do they believe the "Culture of Death"to be a product of capitalism?
Why do we not hear, follow the trail of voters or political pull?
Let's hear your replies.
What do think the Culture of Death is a product of?
Is money the trail to follow to reach the root of the problem?
And how do you commend we fix it?

Critique of Capitalism by Hilaire Belloc

Hilaire Belloc on Industrial Capitalism.

Some quotes from his essay.

"It is equally clear that the more Catholic a country is, the less easily does it accommodate itself to the social arrangement of a proletariat subjected to millionaire monopolists."

"There is the point of Usury, which I have dealt with elsewhere, there is the all-important point of the Just Price, there is the point of the "Panis Humanus"-----man's daily bread, the right possessed by the human being according to Catholic doctrine to live, and to live decently."

"and what moral authority has mere money? Why should I reverence or obey the man who happens to be richer than I am?"

“Everything about Industrial Capitalism-----its ineptitude, its vulgarity, its crying injustice, its dirt, its proclaimed indifference to morals [making the end of man an accumulation of wealth, and of labor itself an inhuman repetition without interest and without savor] is at war with the Catholic spirit.”

“In the absence, the gradual decline [where it is declining] of the Catholic ethic, slavery is coming back. Anyone with eyes to see can watch it coming back slowly but certainly-----like a tide. Slowly but certainly the proletarian, by every political reform which secures his well-being under new rules of insurance, of State control in education, of State medicine and the rest, is developing into the slave, leaving the rich man apart and free. All industrial civilization is clearly moving towards the re-establishment of the Servile State, a matter I have discussed at greater length under the title of "the New Paganism." 2”

To what does Belloc refer in his essay? Is it the market economy? A market economy wouldn't have "State control in education". What then is it?

Your thoughts...

HT: Lucas Bernet

Was Pope John Paul II in support of Capitalism?

This article advocates that he was not. It has many arguments but let us begin with solidarity.

One paragraph in the article states:
"John Paul II criticized the economic systems that lacked solidarity, lacked the biblical and Catholic vision of the “option or love of preference for the poor ,” a phrase coined by Latin American theologians and later refined, which eventually became a key concept of the social teaching of the Church. The phrase appears also in John Paul II's Centes-imus Annus, Pastores Gregis, Tertio Millennio Adveniente and Ecclesia in America . "

Yet the Catechism of the Catholic Church defines solidarity as:

III. HUMAN SOLIDARITY

1939 The principle of solidarity, also articulated in terms of "friendship" or "social charity," is a direct demand of human and Christian brotherhood.⁴⁵

An error, "today abundantly widespread, is disregard for the law of human solidarity and charity, dictated and imposed both by our common origin and by the equality in rational nature of all men, whatever nation they belong to. This law is sealed by the sacrifice of redemption offered by Jesus Christ on the altar of the Cross to his heavenly Father, on behalf of sinful humanity."⁴⁶

1940 Solidarity is manifested in the first place by the distribution of goods and remuneration for work. It also presupposes the effort for a more just social order where tensions are better able to be reduced and conflicts more readily settled by negotiation.

1941 Socio-economic problems can be resolved only with the help of all the forms of solidarity: solidarity of the poor among themselves, between rich and poor, of workers among themselves, between employers and employees in a business, solidarity among nations and peoples. International solidarity is a requirement of the moral order; world peace depends in part upon this.

1942 The virtue of solidarity goes beyond material goods. In spreading the spiritual goods of the faith, the Church has promoted, and often opened new paths for, the development of temporal goods as well. And so throughout the centuries has the Lord's saying been verified: "Seek first his kingdom and his righteousness, and all these things shall be yours as well":⁴⁷

For two thousand years this sentiment has lived and endured in the soul of the Church, impelling souls then and now to the heroic charity of monastic farmers, liberators of slaves, healers of the sick, and messengers of faith, civilization, and science to all generations and all peoples for the sake of creating the social conditions capable of offering to everyone possible a life worthy of man and of a Christian.⁴⁸

Does Capitalism fall short in any of these areas defined by the Catechism or does the author of the article have a misconception of what Capitalism is?

In Memory of Pope John Paul II - Update 4/3

It was four years ago today when Pope John Paul II left us for the heavenly kingdom.

Let us pray for him today for his Beatification process so that we may know that he is in Heaven with our heavenly Father.

Let us also take a moment to reflect on his life's work and perhaps receive a chance to browse through the Vatican's website on him filled with his many homilies, encyclicals, and other works.
Overcoming evil with weapons of love becomes the way in which each person can contribute to the peace of all. Christians and believers of different religions are called to walk this path, together with those who accept the universal moral law.
- Homily from the Solemnity of Mary; January 1, 2005

UPDATE:
A man who had been shot is miraculously healed after receiving a rosary blessed by Pope John Paul II.