26 January 2009

Perennial Debate

I recommended the links posted below to Michael Lind's articles in Salon to a friend who is, I think it's fair to say, an economic conservative, with the caveat that he'd probably disagree with most, if not almost all, of it.

He replied that sure enough, he disagreed with virtually all of it:

i typically cringe when some believe that somehow public policy is the solution to our ills...obviously, most of the time it's the cause. we have plenty of laws against crime, yet crime is a part of our society and more laws create more criminals (bad analogy i know)

for the past several months i have been watching c-span during the day while i am trading. listening to our elected officials, one can only come away believing that they are total ignorant of the fundamentals that govern our economic system. while listening to them "question" Geithner it became quite clear to me that NONE of these people have a clue about the complexities of modern economics. they spent most of the time during the hearing making speeches, prepared by their staffs for the benefit of prime time newsbytes, and had absolutely nothing relevant to ask or say. you could see it in Geithner's face as he prepared to "answer" their questions. and these are the people that we expect to be able to understand the policy implications of their "solutions"? how would you ever believe that, as a group, they are SMART ENOUGH to propose or analyze the effects of the economic legislation before them.

the problems we are facing now have simple solutions. sure, we need to modify existing regulations BUT WE DO NOT NEED AN
OVERHAUL at this point in time.

i could go on.

To which I replied:

... just because elected officials are clueless about how financial systems work (which they certainly are, no argument there), doesn't mean we don't need to overhaul those systems. That's a logical disconnect. I look at it from the point of view that Adam Smith used as a subtitle: A Moral Philosophy.

18th Century moral philosophy was primitive in some of the same ways that 18th century understanding of the evolution and physiochemical principles of life was primitive. A moral philosophy informed by modern history compels the view that a proper role of government is very much to ensure that economic activity is regulated toward the common good, with checks and balances to allow reasonable freedom of (and reward for) enterprise, while ensuring production is favored over speculation, and promoting fairness in taxation, some degree of coherence and social benefit in development, and minimization of impact on the environment, together with a social contract to ensure that everyone in society is afforded an opportunity to achieve a reasonable share in the fruits of production and receives basic services like medical care and protection from extreme poverty. We already have all these things, with cracks, lacunae, and failings, but they are disjointed, weak and ineffective. Major reforms are needed to make them work much better.

I gather you think that amounts to socialism, which we're now virtually conditioned to condemn as wrongheaded per se. To an extent, of course, you're right: some of the principles of 19th century socialists like William Morris [...] are indeed still alive and well in progressive thought. I don't believe in unregulated laissez-faire, and never have, but what's at stake here isn't socialism, but rather a mixed system that recognizes that free enterprise, while indispensable, cannot be the sole engine of control and direction of economic activity if we are to have the kind of society we want.

My main point is that there is and always has been an undercurrent, or better, countercurrent, of thought, which has it that economic policy must be part of the social contract. Whether you agree with this thinking or not, it is just possible with as many people pissed off and disillusioned by what's happened in the last year, the time may be ripe for some relatively fundamental changes in public policy. Those who basically agree with Ronald Reagan's "government off our backs" thinking have had their day, and the majority public impression right now is that that political philosophy failed, and it's time to try something different. Since I never agreed with that thinking in the first place, of course I'm glad to see this potential develop.

The reason I say "may" not "is likely to be" is that I do agree with you that the caliber of most (fortunately, not quite all) of the (especially congressional) elected officials in Washington is pretty dreadful, and expecting these people to do anything that makes any sense is probably futile.

Sorry, but cringe away. Because the only hope for a just and equitable society is major public policy change. If justice and equity are not your goals, OK: they should be; that's what's meant by moral philosophy; but that's your right. For myself, I am totally on board with these purposes and that simple premise.

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