Harry Veeder wrote:
A market economy with private property rights and flexible prices
can be rationally defended on the grounds that it is the best way to
produce
_real_ wealth. However, if I remember correctly, even the great
market economist F. Hayek conceded that the workings
of a market economy do not provide a rational basis for judging
whether a particular person's _monetary_ income is _deserved_.
Boy you sure wouldn't get an argument from _me_ on that.
Unless you're a follower of Ayn Rand it's hard to see how capitalism can
be defended on _moral_ grounds.
The trouble is, no other system seems to work nearly as well, and what's
worse, the effectiveness with which capitalism "works" appears to be
directly related to the size of the gap between rich and poor, because
that "gap" is a direct measure of the incentive everyone has to work
harder in an effort to become rich. (In addition, of course, there
also must be adequate social mobility; inherited wealth does _nothing_
to stimulate people to work harder, and the landed gentry are just a
drag on the wheels of progress.)
_But_ the market economy can be hideously unfair, it makes implicit
value judgements of everyone based on arbitrary criteria, and if it's
unbridled it tends to leave people at grave risk if anything bad should
happen. Capitalism provides wealth; it does not naturally provide
security. As Jed might point out, all of these problems go strongly
against our instincts as pack hunters who take care of their own and
share the food. So most people, regardless of their religion, would
probably agree that completely unbridled capitalism is just plain "wrong".
So, we strive to "de-tune" the system a bit to make it fairer without
breaking it entirely. Almost everybody is in favor of a progressive
income tax, for example, even though it reduces the incentive to work
harder in order to make more money. Unemployment insurance seems like a
Good Thing even though it reduces the incentive to find another job when
you're laid off. The Swedish model looks pretty good; the Norwegians do
pretty well; the Russians, who tried to throw capitalism overboard
entirely under the Communists, went too far and didn't manage to make it
work (operating your empire at a loss and trying to make up for it by
anexxing more countries, which are also operated at a loss, can't work
indefinitely).
Harry
