I don’t know if it’s allowed to blog about an article that’s over 10 days old, but I just came across one by Jim Manzi called “Factory Guy.” In the comments Jim in turn links to an article he wrote earlier this year: “A more equal capitalism: preserving the free-market consensus.” He summarizes the dilemma thusly:
So here we have our current economic situation: We are rich and economically successful, but increasingly unequal. If we give up the market-based reforms that allow us to prosper, we will lose by eventually allowing international competitors to defeat us; but if we let inequality grow unchecked, we will lose by eventually hollowing out the middle class and threatening social cohesion.
Conservatives and libertarians understand the first part of this, but have their heads in the sand about the 2nd. Because they won’t face reality, leftwingers eat their lunch at the polls, and then join with rich businesspeople in making the situation worse by enacting regulations and controls that make the rich richer and the poor poorer. (Milton Friedman explained how that part works.) Liberals have nothing to say about it, because there are no liberals.
Manzi explains the social cohesion part:
Absolute income equality, a.k.a. communism, is a poor goal, but if inequality becomes sufficiently extreme it undermines the social support required for a democratic and capitalist society to flourish. To take only the most obvious example, how much do you think high-income Americans would make in the absence of our armed forces? All of the material delights that we enjoy ultimately require men to stand watch all night looking through Starlight scopes mounted on assault rifles, and die if necessary, to protect the commercial, law-bound society that provides those delights. Would you do that for a millionaire hedge-fund manager who happens to live within a country that he considers some lines on a map, and who considers you a sucker for doing it? The United States is nowhere near such a dystopia, but it’s generally not a good idea to keep pulling bolts from an airplane in mid-flight just because it hasn’t crashed yet.
I’m not sure about the few suggestions Manzi gave for what to do about it, but I am extremely pleased that somebody who appreciates markets is discussing it at all. I have a few ideas of my own, but I don’t have the resources to give them the study they would require, and I have found nobody with whom to discuss them.
Conservatives and libertarians are hopeless. They won’t admit that there is a problem. And leftwingers fear and loathe markets so much that they can’t hear anything except reasons for why markets (i.e. choice) need to be shut down and control turned over the state.
You can’t get a discussion going of good vs bad regulation. All you get is regulation vs deregulation. At least that’s what I’ve been saying until now. But Manzi is providing a small ray of hope that it doesn’t need to be that way.