A well known phrase in the United States, this standard of government has been a cornerstone since the founding fathers. Even today, however, much controversy surrounds it. Just where did this idea come from? What does it actually mean? Does it work?
The very idea of seperating church and state came from the very founding of this nation. Reading from Article Six of the United States Constitution, it is said that "no religious test shall ever be required as a Qualification to any Office or public Trust under the United States". This would mean that there would be no religious requirements to hold any sort of political office, preventing the dominance of one religious group's official power over another. Furthermore, the First Amendment within the Bill of Rights reads that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof". Forming what are known as the "establishment clause" and "free excercise clause", the amendment prevents the government from establishing a national religion nor preventing someone from following whatever religion they so please.
Both James Madison and Thomas Jefferson have written their own thoughts on the topic. Within Madison's papers, in an August 15, 1789 entry, he "said he apprehended the meaning of the words to be, that Congress should not establish a religion, and enforce the legal observation of it by law, nor compel men to worship God in any manner contrary to their conscience....”. While fully supporting the amendment, some controversy surrounds just what is meant by "[enforcing] the legal observation of it by law". Though it relates to an established religion, speculation arises whether this lega observation also extends to all religions. This could mean that laws based on the ideals of a religion would in fact be infringing on the rights of those who do not follow them.
Originally coined by Baptist theoligian Roger Williams in 1644, the term "seperation of church and state" is attributed to Thomas Jefferson. In a letter to the Danbury Baptists in 1802, Jefferson wrote of the religious portion of the first amendment and how it was "building a wall of seperation between church and State". Much controversy surrounds this document and Jefferson himself. Many argue that the quote is made up and deny the existence of this letter, despite the fact that it is real and public knowledge that is readily accessible from the internet. Controversy around Jefferson mostly comes from fabrications of his own religious beliefs, dispite documented evidence and historical accounts of his lack of faith it is argued that he was a highly religious figure with very limited and often questionable evidence.
Following the strictest of interpretations, the seperation is a success. There have been no national religions since the ratification of the Bill of Rights and the 14th Amendment now prevents any state from establishing their own state religions. Previous religious tests were removed and now people of any belief are free to pursue any office they so choose. People are free to practice their faiths free of government persecution.
Controversy still stems from what truly does seperate religion from the government, however. With many social subjects arising today that were not common, recognized, or simply not created at the founding, debate of these subjects are often left unchecked and riddled with religious ideals. Subjects such as same-sex marriage, stem cell research, and abortion are plagued by the religious beliefs of those against it, often times the basis of laws against them. However, is this really the government forcing the ideals of one religion on the people? Are those that argue that we are based on an overtly Christian beginning and preaching their religious beliefs trying to force their religion upon us?
Is the church really seperated from the state?
tl;dr: Article 6, 1st Amendment. Madison & Jefferson liked it. Did its job. Government still used to force religion on people.
Sunday, August 14, 2011
Friday, August 12, 2011
Critiques of Keynesian Economics
Though an efficient and working economic theory, Keynesianism faces several critiques of various parts of its overall policy. These criticisms stem from various economics schools and pick apart the theory, some of which are actually substantial claims while others seem to have failed the test of time.
The Monetarist School embraced the macro-measurements and treatment of the economy as having a supply and demand equilibrium. However, they argued that inflation was solely due to variations in the money supply, rather than being a consequence of aggrgate demand. Monetarists also believed that the policy of government investment into the people would cause a "crowding out" of businesses because of their inability to compete with the government. This is said to hurt or deprive fiscal policy of its positive effects. Both criticisms are correct and have led to revisions and a more balanced monetary policy in the Keynesian theory.
Criticism also comes from a Classical Liberal point of view. It is said the money used to repair damage, such as stimulus, comes at an opportunity cost, the cost and sacrifice related to the second best choice available in terms of best forgone alternative. Government decisions are also able to be just as misguided as private-sector decisions, leading to unintended consequences. Changes to interest rates either increase GDP or the value of currency, but never at the same time. If stimulus money is misspent, this may lead to lower GDP, reduced value of currency, and high inflation. Stagflation, high interest rate and low economic growth, plagued both Jimmy Carter and Barack Obama. This situation is a dilemma for Keynesianism as actions were designed to lower inflation may hurt economic growth and vice versa. Stagflation and/or misspending stimulus can then cause a net-loss to society. Though these criticisms have proven true, the faults seem to fall not to the theory but the misguidance and bad decisions of people themselves.
The Lucas Critique, which formed the basis of the New Classical Macroeconomics school of thought, focuses on how Keynesianism stands up against changes in policy. With some relationships based on aggregated historical data, whenever economic policies changed decisions made from these models would be misleading. Decisions to maintain conditions that provide the outcome most wanted can often cause firms to change policies. With low unemployment attributed to high inflation in the Phillips Curve, monetary authorities could exploit this by keep inflation high. This would lead to firms' inflation forecasts to rise, changing their employment policy. The Lucas Critique calls for macroeconomists to build microeconomic foundations to their models for the economy.
The Austrian School seems to have the most criticisms for the Keynesian theory. Keynesianism is seen to have a fundamentally collective approach, encouraging centralized planning, which leads to malinvestment of capital; this, according to the Austrian school leads to business cycles. Keynes' study of aggregate relations is believed to be wrong because recessions are caused by microeconomic factors. These economists also believe that temporary government fixes become permanent and expand, which stifles the private sector and civil society. Though not lacking in arguments, the Austrian School tends to lack any evidence to support these claims and often disregards empiracal or mathematical data for other theories or its own. This entire school is actually widely ignored by many economists because they ignore facts and often overstate claims.
Several criticisms have changed parts of the Keynesian theory, ultimately, however, it has stood the test of time as one of the most reasonable theories and is often the basis of policies and newer theories today.
tl;dr: Focus on money. People are idiots. Conditions change, theory too general. Stop liking what I don't like.
The Monetarist School embraced the macro-measurements and treatment of the economy as having a supply and demand equilibrium. However, they argued that inflation was solely due to variations in the money supply, rather than being a consequence of aggrgate demand. Monetarists also believed that the policy of government investment into the people would cause a "crowding out" of businesses because of their inability to compete with the government. This is said to hurt or deprive fiscal policy of its positive effects. Both criticisms are correct and have led to revisions and a more balanced monetary policy in the Keynesian theory.
Criticism also comes from a Classical Liberal point of view. It is said the money used to repair damage, such as stimulus, comes at an opportunity cost, the cost and sacrifice related to the second best choice available in terms of best forgone alternative. Government decisions are also able to be just as misguided as private-sector decisions, leading to unintended consequences. Changes to interest rates either increase GDP or the value of currency, but never at the same time. If stimulus money is misspent, this may lead to lower GDP, reduced value of currency, and high inflation. Stagflation, high interest rate and low economic growth, plagued both Jimmy Carter and Barack Obama. This situation is a dilemma for Keynesianism as actions were designed to lower inflation may hurt economic growth and vice versa. Stagflation and/or misspending stimulus can then cause a net-loss to society. Though these criticisms have proven true, the faults seem to fall not to the theory but the misguidance and bad decisions of people themselves.
The Lucas Critique, which formed the basis of the New Classical Macroeconomics school of thought, focuses on how Keynesianism stands up against changes in policy. With some relationships based on aggregated historical data, whenever economic policies changed decisions made from these models would be misleading. Decisions to maintain conditions that provide the outcome most wanted can often cause firms to change policies. With low unemployment attributed to high inflation in the Phillips Curve, monetary authorities could exploit this by keep inflation high. This would lead to firms' inflation forecasts to rise, changing their employment policy. The Lucas Critique calls for macroeconomists to build microeconomic foundations to their models for the economy.
The Austrian School seems to have the most criticisms for the Keynesian theory. Keynesianism is seen to have a fundamentally collective approach, encouraging centralized planning, which leads to malinvestment of capital; this, according to the Austrian school leads to business cycles. Keynes' study of aggregate relations is believed to be wrong because recessions are caused by microeconomic factors. These economists also believe that temporary government fixes become permanent and expand, which stifles the private sector and civil society. Though not lacking in arguments, the Austrian School tends to lack any evidence to support these claims and often disregards empiracal or mathematical data for other theories or its own. This entire school is actually widely ignored by many economists because they ignore facts and often overstate claims.
Several criticisms have changed parts of the Keynesian theory, ultimately, however, it has stood the test of time as one of the most reasonable theories and is often the basis of policies and newer theories today.
tl;dr: Focus on money. People are idiots. Conditions change, theory too general. Stop liking what I don't like.
Subscribe to:
Posts (Atom)