Friday, October 02, 2015

The Economy is a Good Servant But a Bad Master

The economy exists to serve the needs and wants of everyone.  Society should regulate the economy just enough to make sure it does that job.  This regulation is done through the state and through the customs and mores of the people.

The "real economy," argues David Halpern in The Hidden Wealth of Nations, consists of the quality of relations among individuals and among social groups.  This is what most people value the most. The money economy and the production/consumption economy should serve human relations, not the reverse.

Society becomes distorted when, instead, the government and even the customs and mores are shifted to serve the economy.  The idea that society is best off if the market is left free to maximize profit for owners serves the owners, but hurts everyone else. In this as in all things, proportion is vital.


Mac said...

A government-controlled economy surely worked well in the Soviet Union, eh?

Charles Martel said...

"The economy exists to serve the needs and wants of everyone."
I would say that the economy is the intersection of products/services, needs and wants, and abilities of everyone. It does not "exist to serve" it exists because of there are things to be exchanged.

State regulation of economies, as you describe, has a very poor track record.


Barry said...

Most thinking analysts would agree that free markets have been the best growth vehicles in the long history of the world, and that they have lifted many millions from extreme proverty. However totally free markets without a moral compass and the assist of government regulations to promote the common good lead to situations such as that of the cheating on emissions texts by VW, the sale of posison and fouled food and drugs, and the 5000% rise of a decades old parasitic drug price by hedge fund CEo Martin Shkreli after he obtained the company

ceemac said...

Kruse Kronicle has noted several times through the years that there is a difference between a free market economy and a free market society. He advocates for the former not the latter.

Gruntled said...

Yes, the regulation of the market is a task of all the institutions of society, not just the government.