economic fairness and liberty
In past postings, I suggested social justice might be achieved by some proportional cap on the top income echelon. I argued that the wealthiest individuals could increase their own incomes only if they would also bring the lowest economic level up as well, because the prosperity of those wealthy individuals is in some measure due to the fact that the workers with the lowest income allow the wealthy business owners and investors to achieve low production costs and high profit margins.
I'm not married to this solution and I wanted to revisit the problem now that I've been exposed to some more different views. Upon further reflection, I'm not certain such a system is even practicable. That is the first problem. The second issue which I believe obliges us to answer is whether we can justify limiting the economic liberties that result in the economic inequalities in all societies.
Rawls, whose writings I've cited in the past, proffers two principles upon which he suggests just laws could be formulated.
1. laws ought to grant the greatest liberty compatible with like liberty for everyone.
2. social and economic differences are tolerable so long as they mutually benefit all citizens and so long as all citizens have equal opportunity to fill the more powerful positions and offices in a society.
I'm not necessarily interested in laying out a platform or policy or even principles on this post. I would like instead to engage in a conversation with everyone here in order to explore these ideas.
Here are some of the questions I would like to explore, if you will humor me.
1. Is there justification for limiting economic liberty beyond the limitations set by Rawls' first principle.
2. What are the basic financial needs of the working poor or, to put it another way, what living expenses does a livable wage include?
I think I'll leave it at that for now. We can see where the discussion goes.
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Why Capitalism Needs the Left
David, there's a book I'm reading called The Collapse of Liberalism: Why America Needs A New Left, by Charles Noble. It was written in 2004 and there's a chapter called Why Capitalism Needs the Left that fits nicely with your post.
He wrote:
"In combination, free markets and capitalism have also helped usher in and sustain fundamental political changes, widening the scope both of personal freedom and political democracy. Because of this system, more people get to choose where to work, what to consume, and what to make than ever before, while traditional inequalities of rank and status are overturned.
The spread of market capitalism has also laid the foundation for the expansion of democratic decision making. With the establishment of private property and free exchange, political movements demanding other freedoms, including wider access to government, have proliferated. To be sure, capitalism cannot guarantee personal liberty or political democracy-it has coexisted comfortably with dictatorships too, from Nazi Germany to China's current amalgam of free enterprise and authoritarian rule- but to date, no society has been able to create and maintain political democracy without first establishing and securing a market capitalism system...
But market capitalism is not a machine that can run on its own. It needs rules, limits, and above all, stewardship. Partly because it is a machine and therefore indifferent to human values, and partly because there is no central planner to assure that everything works out in the end, there must be some conscious effort to bring order to this chaos. Left to it's own devices, unfettered capitalism produces great inequities, great suffering , and great instability. In fact, these in-built tendencies are enough to destroy the system itself...
To the extent that capitalism has served the interests of the vast majority of Americans, and not just a few rich investors and corporate executives, the left deserves the credit... In the twentieth century, it was the left that fought for racial justice, worker rights, equal opportunity, women's liberation, environmental justice, consumer proection, civil liberties, and antidiscrimination laws- the whole panoply of social and political changes that made America a better society."
synthesizing ideas
Thanks for your responses Rich and Angelo. You've both made some good comments. But Rich seems to be leaning in a "government which governs least, governs best" direction and Angelo seems to me to be leaning in the opposite direction.
Rawls suggests that in an ideal world, we would emphasize equality. However, because human nature is selfish and we are prone to strive only when we perceive greater reward for greater effort or application of skill, the real demands a system that acknowledges and compensates for this aspect of human nature. The idea, as I understand it, is that we lean as far as we can in the direction of equality making necessary allowances for our (ambitious) nature. I imagine this would be manifest as a hybrid of socialism and capitalism.
On the other hand, Rich seems to be suggesting (correct me if I'm misreading your post Rich) that the government should be more hands-off, so long as they provide mechanisms to ensure equality of opportunity. I know your post was not comprehensive Rich, but do you think that a safety net is an important function of the government?
Here are some of the questions that I've been processing in the last few weeks. What are the virtues of capitalism and what are the dangers it poses? Are there ways to mitigate the social dangers while fostering the virtues? Would those mechanisms necessitate curtailing economic liberties? If so, on what principle(s)?
What do you all think?
I believe in a level playing field.
Well you do seem to have gotten my message. Let people do for themselves what they can, are capable of doing. I am a strong believer in finding, for yourself, that delicate balance between free will and full responsibility for the consequences of our actions. From science I learned that for every action there is an equal and opposite reaction.
Greedy people are their own worst enemy. In Mark 4:24 we hear, --with what measure you measure it will be measured to you again and will increase, especially to those who hear." If you know you are doing wrong then to you shall be subject to even harsher punishment.
We are, by nature, social creatures, needful of cooperation, to be respectful of each others desires and to provide for mutual defense. I hold the Golden Rule to be the basis of the most powerful ethical standard. I think stating it as The Ethic of Reciprocity says it all quite succinctly. Do what you can for yourself, take pride in your accomplishments and responsibility for your errors.
Work cooperatively to provide that which we, as indidivuals, can not or would find hardest to provide for ourselves. IMO, the idea of a social safety net is very important, there are folks like the youngest, eldest and handicapped that are just not able to provide, adequately, for themselves.
Regarding the virtues of capatalism, I have been an entrepreneur. I owned and operated a very successful land use consultancy in the early 80's. Had I been a better money manager I might have continued a bit longer but my deep spiritual calling lead me on elsewhere. It's one thing to put together a company, and yet another to manage it well. That's one of the pitfalls. I would recommend it for anyone, at least once.
On the other hand, Thomas Jefferson, in a letter dated March 17, 1814, to one Horatio Spafford, warned that "Merchants have no country. The very spot they stand on does not constitute so strong an attachment as that from which they draw their gains." In modern language this means they are loyal only to the nation from which they make their greatest profit. This means they form no long term alliances, and shift present ones as the tides of international trade flow.
I add one more thought here. In 1 Timothy 6:9 & 10, Paul warned us, "For the love of money is the root of all evil--". Capitalism is based on the profit motive. Those who get swept up in the false notion that money is is the best security wind up both disillusioned, and broke.
Rich
Caps on earnings of higher income people
David, in writing my post I realize I'm not really answering your questions. You wrote:
"Rawls, whose writings I've cited in the past, proffers two principles upon which he suggests just laws could be formulated.
1. laws ought to grant the greatest liberty compatible with like liberty for everyone.
2. social and economic differences are tolerable so long as they mutually benefit all citizens and so long as all citizens have equal opportunity to fill the more powerful positions and offices in a society.
Here are some of the questions I would like to explore, if you will humor me.
1. Is there justification for limiting economic liberty beyond the limitations set by Rawls' first principle.
2. What are the basic financial needs of the working poor or, to put it another way, what living expenses does a livable wage include?"
I do think there are some justifications for limiting some economic liberties. In the early 20th Century, the Progressive movement and the New Deal helped push for the Pure Food and Drug Act, a push for child labor laws, anti-trust laws, to push to protect the environment, to help organize workers. All of these things curtailed the freedom of businessmen and corporations on their business practices, on what they could purchase for the benefit of their businesses. But the limits placed on businesses made sure that poorer people were able to protect their freedoms and not have their rights be trampled over.
As for a living wage, I think one in which a person can feed oneself and a family, live in a decent home without putting too large a percentage of one's wages into rent.
I like what Rich wrote and don't have any real disagreements with the ideas of free will and individual responsiblity. I do support strong government involvement in helping alleviate the problems of the poor, but I also understand how government bureacracies can be cumbersome and frustrating with its red tape. I think there will always be a tension between the balance of individual freedom and government responibilities and I think it's a healthy debate. An argument can be made that curtailing the side effects of free markets can be done in other ways besides government, like through the organization of workers into unions, the organization of farmers into collectives, or the creation of consumer action groups, like Ralph Nader made in the 1970s. In the 1960s, some radicals of the New Left were disillusioned with the Great Society and argued for greater local control and citizen participation rather than waiting for the government to do something. I think some combination of both government and citizen participation is needed to curtail the worst aspects of capitalism because of the large scope of the problems.
re:synthesizing ideas
The ideas that you're dealing with are ideas that the Founding Fathers argued over during the early days of our country. They dealt with agrarian versus mercantile economies, but it dealt with similar issues of local control versus federal control, and ideas of balancing freedom and equality. James Madison, Alexander Hamilton, Thomas Jefferson and John Adams, all had different ideas about it.
I'm not an expert, but if you look at 19th Century United States and Europe in the industrial revolution and compare it to China and India today, it seems like both are facing many of the same benefits and faults of the free markets. In both cases, a rapidly growing economy has created a large middle class and there is greater economic mobility and a rising standard of living. The large amount of people with greater economic power meant they had the time and the finances to fight for greater political rights and enact reforms in their society. The bad thing is that the economic growth of the free markets do not touch all people; those who are left behind are worse off, and are vulnerable to being expoited in sweat shop conditions. Their lack of financial clout also translates into a lack of political power, as they are left voiceless in the political realm. Free markets depend on exploiting natural resources and this often leads to horrible pollution problems and the destruction of natural habitat, as the U.S. in the 19th Century and China and India today face. And free markets go through boom and bust cycles, and these economic downturns are especially hard on the working class and the poor.
I think only government has the resources to mitigate such large economic problems, but I'm open to hearing about more local solutions. In the 19th and 20th Century in the U.S. the Progressive movements, the labor movement, and the New Dealers and various movements pushed the government to enact reforms to mitigate free market problems.
A simpler solution
IMO, the role of government is to provide a level playing field for all. To achieve this government must provide that which citizens can not readily do for themselves. Provide affordable education, transportation (roads, harbors and mass movement of people), reliable utilities, public safety (police, fire, prisons, hospitals), a monetary system and the like.
To pay for this I say simply "those who benefit the most, should pay the most."
Economic Fairness sounds good to me
Glad to see a new post from you David. Food for thought. I've read from Zinn and various radical and liberals that share this idea that the working poor should benefit from their labor. The idea that the wealthiest individuals could increase their own incomes only if they would also bring the lowest economic level up as well is a good idea, but what kind of economic system would be able to achieve that? A socialist system, like that which is being attempted by Hugo Chavez? A more European style socialism? A New Deal type liberal system that tries to alleviate the worst aspects of capitalism? I think theoretically I like Rawls two points. The tough part is translating it to the nitty gritty of the real world. I personally like the New Deal type liberal system, but I'd be more supportive of socialist systems if I could be given an example of one that works and doesn't sacrifice political freedoms
Swedes and Socialism
The Swedes have a basically socialist system and are very Democratic. (At least last time I looked they were calling themselves Socialists.)I am not necesarily advocating this type of system just pointing out an example of a country that is both democratic and socialist. New Zealand is very progressive in their delivery of human services and very democratic. I don't know if they are calling themselves Socialists or not. "Socialist" can be a subjective term with everyone from European democrats to Communist Chinese calling themselves "Socialists".
Personally I like a well regulated competitive capitalism,with government delivery of necesary Social Services, education, medical, police and fire, etc. A robust improved progressive version of the New Deal is what is needed for a new century.Mixed economies are emerging as the strongest survivors.The Soviet Union fell, they were extremists.We are at the edge and teetering on disaster. We too are extremists and our crazy version of capitalism gone mad is pushing us over that edge.
Good comments Jim on Swedes and Socialism
I don't really know the Swedish system too well, but people have confirmed your opinion that the Swedes seem to have a good balance of socialism and democracy. I don't know too much though about New Zealand.
I had an insight from reading Frank's post on Robert Kennedy that I didn't have before. Bobby Kennedy, instead of wedding himself towards one school of progressive thought, like New Deal liberalism or New Left radicalism, picked and chose the best ideas of each thinking. I guess each system has its good points. The New Deal co-opted ideas of Norman Thomas and the Socialists to create Social Security and the NRA. The idea of farmer collectives and worker guilds is shared by Catholic Workers, and Hugo Chavez and the 1960s New Left. I likewise agree with Jim that I like a well regulated competitive capitalism,with government delivery of necesary Social Services.