Robert Kuttner
Robert Kuttner is an American journalist, writer and economist.
By default, we have created a "system" of nursing-home care for the aged in which middle-class people pay exorbitant rates to for-profit nursing-home entrepreneurs - and then when private resources are consumed and the patient qualifies as a pauper, the nursing home begins billing Medicaid. This is precisely the antithesis of social citizenship; instead of the poor being accorded the dignity associated with the middle class, equality of treatment is achieved by making the middle class undergo pauperization.
In practice, a good deal of the outcomes produced by the market reflect nothing more than luck - good or bad.
But of course you can have your cake and eat it, too - if you decide to to bake a second cake. And you may well find that baking two cakes does not take twice the work of baking one.
Can we reverse these deeply rooted sources sources of inequality? Or are they just endemic to a capitalist economy?
Britain, with the most completely socialized health system in the West, now spends the lowest fraction of GNP on health care of any major nation. There are frequent complaints of excessive waits for elective surgery and other inconveniences, but British citizens live slightly longer than Americans, on average, and our overall health conditions are comparable.
The economic illusion is the belief that social justice is bad for economic growth.
American critics of welfare statism are often surprised to learn that countries like West Germany, with a much more comprehensive welfare state and a statistically "larger" public sector, have fewer government employees per capita than the United States does.
Political conservatives have focused on tax reduction as an economic growth strategy for three reasons. First it is self-serving; it saves rich people lots of money. Second, it comports with their ideological allegiance to laissez-faire economics. And third, tax incentives are less intrusive to business-as-usual than any other form of government planning.
Henry Ford, in a sense, was the first Keynesian. He paid his assembly workers high wages so they could afford to buy his cars.
We are already well down the road toward a managed-trade regime. It would be far better to acknowledge that reality, and seek a set of reasonable rules, than to pretend that Ricardian trade is the norm and allow mercantilist states to overwhelm U.S. industry and ratchet down wages, in the name of free trade.
If Boeing got a big head start on the 707 from multibillion-dollar military contracts to develop an air force transport, is that a sin against free trade?
In America, we build public housing by creating lucrative inducements to private developers, and then wax indignant at the public waste.
The total impact of the Reagan tax cuts on capital lowered the effective cost of capital to American industry by an estimated 1.2 percent. Unfortunately, the Laffer curve did not work as advertised. Lower tax rates did not produce more tax revenues. They produced deficits.
It is more than a little ironic that "capital accumulation" once a rather tendentious Marxian view of a supposed capitalist obsession, should have become - of all things - Wall Street's own slogan.
Kuttner then enumerates the limitations of markets. Deregulation of airlines, for example has led both to a loss of service and to higher average fares. Nor are free markets really free. They come to be dominated by giants, like Time Warner and Rupert Murdoch.
Why, then, should we have to lower our living standards? What is the mysterious source of the economic loss? If productivity is increasing, why should we sacrifice services and wages?
Technological change is beneficial only when other jobs replace the ones lost.
When laissez-faire creates instability, the move to a freer market can be something less than pure gain.
Technological advance often thrives in sheltered and subsidized markets, which defy free trade.
I have tried to suggest that injustice is not necessary economics;that the economics can work, and has often worked, when the constituency for it is animated. The politics of equality - that is a little harder.