. The main argument is that those who argue for marketizing everything are short-sighted and miss the reality of the world; deregulation of airlines, for example, led to worse deals for the customers and less profits for the businesses. In a benchmark for future debate, Kuttner brings, clear, pragmatic thinking to complex, thorny issues, reclaiming a middle ground between champions of laissez-faire capitalism and statism. In Everything for Sale, Kuttner makes a powerful case for the mixed economy, in which government steps in to override markets for a variety of reasons: to stabilize monetary forces, to promote growth, to temper inequalities, to cultivate civic virtues. For instance, while commending their role in facilitating commerce, setting prices for goods and services, and allocating resources, he cites a lengthy list of instances in which markets fail to measure up. And so that created an opening for a second romance with laissez faire in the economics profession, in the business community, and among public officials. Kuttner would be quick to point out that the I.
As government recedes as a player, to some extent non-profit institutions try to fill the void. Berle and Gardiner Means, published just before the beginning of the New Deal; ''The Affluent Society'' 1958 , by John Kenneth Galbraith, a very early harbinger of the Kennedy-Johnson era of government activism; ''The Way the World Works'' 1978 , by Jude Wanniski, and ''Wealth and Poverty'' 1980 , by George Gilder, two books that presaged and justified Reaganomics; and ''The Work of Nations'' 1991 , by Robert Reich, which called for a good deal of what President Clinton proposed in his first year in office. Challenging the prevailing conservative doctrine that an unregulated, self-correcting, free-market economy is the ideal, Kuttner The End of Laissez-Faire argues that in a humane society, whole realms of activity necessarily depart from pure market principles because market norms drive out nonmarket norms--civility, commitment to the public good, personal economic security and liberty. I think, to begin with, the American character is rather individualistic. People, ordinary people, intuitively do not like what the market is doing to healthcare.
A much needed plea for pragmatism: Take from free markets what is good and do not hesitate to recognize what is bad. And if you turn man or woman into merely an economic creature, you impoverish social man, you impoverish political man. In his three-part audit, Business Week columnist Kuttner first provides an overview that effectively damns markets with faint praise. What, if anything, can be done to alter the prevailing ideology of unfettered laissez faire? Kip Viscusi's 1984 article arguing that child-safety caps on medicine bottles would inevitably increase child poisonings because parents would leave the caps off, and that the actual decrease in poisonings could be attributed to economic growth, not safety caps. There are cases of deregulation that did not perform as advertised.
Robert Kuttner's ''Everything for Sale'' is meant to be the same kind of book. Having one's book on the cover of The New York Times Book Review is always nice for an author. Examples would be ''The Modern Corporation and Private Property'' 1932 , by Adolf A. Well, if one is a pessimist one concludes that fundamental change will only come as a result of a global crisis. Bill Bennett, the conservative-culture czar, in November gave a very interesting speech warning about the effect of untrammeled capitalism on culture. There has been a whole intellectual current, beginning in the 1970s, that has argued that most of what government does can be done better by the private market.
It is the system that, Kuttner contends, holds the greatest hope for a flourishing twenty-first century. Kuttner is an economics journalist who is conversant with the academic literature on his subject but regards mainstream professional economists warily -- and, in the case of neoclassical economists, with something close to contempt. Government made us prosperous by creating the higher education system, railroads, canals, commercial aviation and the Internet. Has the response been what you'd hoped it would be? What sparked this romance with the marketplace, with laissez faire? A shameful waste driven by a seeming unwillingness to not discard priors. And you can look at a graph of declining fatalities in civil aviation, and you have a nice, steady decline to about 1978, the year of deregulation, and then it sort of plateaus. He is also one of the three founders of The American Prospect, the ambitious new liberal magazine; the two others are Mr.
Kuttner says, ''by the time Ronald Reagan took office in January 1981, much of the Reagan crusade was pushing on an open door. We have lower rates of tax on wealthy people; we have less transfer of income to poor people; we have relatively less money going to institutions that give people what the English call social income--that is, income that you get as a citizen rather than as an employee, whether you're rich or poor. But if the prevailing winds are blowing in favor of ever-expanding and freer markets, in the past few months there have been some notable gusts in other directions. And so you had business groups like the Committee for Economic Development, which sounded almost like Social Democrats: business groups that felt that a mixed economy was just inevitable, that they had to make their peace with unions, that they had to make their peace with regulation. One now frequently hears arguments, sometimes from corporate executives, that maximizing shareholder value is a muddle-headed and counterproductive aim for corporations. Do you agree that there has been such a shift? It should not be a free market. Enter , a founder and co-editor of magazine, a longtime contributor to The Atlantic, and the author of Alfred A.
In their place, free marketplace, laissez faire, and deregulation, deregulation, deregulation became instead the mantra of modern times. I think you lower expectations, you sometimes induce passivity. But people don't think of it as redistribution. Once you have rules, those rules have to be determined by government and politics. And I think most of us as citizens would recognize that we like a society where there is a big place for the entrepreneur. In like vein, the author offers kind words for Japan's bureaucratically guided approach to capitalism without dwelling on that nation's consumers, who are obliged to pay artificially high prices at retail as a result of the system. Regulation is a critically important aspect of free market society.
Kuttner as they do to conservatives and neoliberals. One by one, he lays on cases where governments have outdone markets, or at least performed well. Are we stuck with Thurow's paradox? We did not go as far as the Europeans went in constructing, say, universal health insurance, and there were areas where I thought and still think that the public sector should play an even larger role. In the workplace, a growing tendency to treat human labor purely as a commodity has led to an increasing polarization of wages, erosion of standards of fairness and greater worker insecurity, he maintains. What, if anything, can the government do at this point, given the political realities of the moment? In theory, economic centralization is undertaken only to improve the health, welfare and well-being of ordinary people.
By way of example, the author notes that there is no good market reason for free public libraries, which most polities rightly value. Government was given more legitimacy to play a major role in the economy than ordinarily would be given, first, because of the Depression, and then because of the war, and then again because of the Cold War. A much needed plea for pragmatism: Take from free markets what is good and do not hesitate to recognize what is bad. It is the system that, Kuttner contends, holds the greatest hope for a flourishing twenty-first century. Markets, Innovation, and Growth 7.
You talk about American tradition, and American values, and how they fit into this. How do you react to such a statement coming from someone like George Soros? On the whole, though, he tends to doubt that any market can really work properly on its own, and to miss what markets are doing right. The conclusion he draws from this is that we should have got the situation under more complete regulatory control, rather than that such control can be a chimera. Alan Greenspan--not somebody who doesn't trust markets--says that there's a stock-market bubble. There's the Law and Economics movement in the law schools, which benefits from tens of millions of dollars of right wing foundation money.