Small post: Economic Dignity

March 08, 2020

I've been meaning to read this piece since it came out last spring and I found the time to do so today.  

It's a defense of the idea of "economic dignity" as the main logic of economic policy.  This is not about generating maximum GDP, nor is it about maximizing shareholder value.  Both of those goals would make the system serve an abstract economic metric.  

In contrast, the vision promoted here makes the system serve an account of human flourishing.  This is about an economics that explains why we care about economics not in terms of "more economics," but in terms of the human goods that economics can provide: time, security, freedom, above all dignity--respect and recognition and a sense of other-regard and self-worth.  Markets would be regulated with the ultimate aim of making peoples' lives more worth-while.  That is not the same as economic value.

I'm not saying that markets are evil.  I'm committed to a basically free-market system.  But I am saying that regulations should be in place to ensure that the market does not rule us, but we rule it.  I don't mean by "rule" that we get to determine whatever we want it to mean; but I do mean that we need a vigorous mode of engagement in market workings so that we continually resist the market's perpetual tendency to edge ever closer and ever closer into seeking simple short-term profit:

 

Today, even some commentators on the right have questioned the virtue of loyalty to market fundamentalism that seems blind to morality or fairness. Such protestations are welcome, but they have little substance without a willingness to deploy public policies and regulations to structure market competition and foster economic dignity. While many conservatives reflexively label all regulation as anti-market interference, regulations that outlaw exploitative and predatory practices toward workers and consumers can better be seen as simply structuring “high road” competition that does not allow competitive advantage to be achieved by race-to-the bottom practices. In poorly regulated markets, those seeking to take the high road on economic dignity can legitimately fear losing market share as well as credibility within their companies if they can be undercut by competitors legally deploying exploitative practices. It is this rationale that should be seen as a core component of the CFPB’s mission and of consumer regulations that seek to prevent predatory practices in areas like mortgage origination, payday lending, and for-profit education. Increasing the legal clarity around the fact that executives or boards of directors should, or at least can, prioritize the well-being of workers and the economics and environment of communities—as opposed to just maximizing shareholder value—is another example of how restructuring market rules can encourage or at least not undercut competition that promotes economic dignity.

Care for family, investments in education, attention to the whole lifespan of people (especially given demographic, economic, and social challenges of an aging population) are all engaged here.  It's worth your reading, or so I think.