Updegrave: Free Market Morality

A good, conversational primer on free markets and political economy from Walter Updegrave at Money:

…when you’re considering whether our system is equitable, don’t restrict your gaze to a single group of people. You’ve got to consider the ripple effects actions may have on other groups. An attempt to give an advantage to one party (in your case, deserving homeowners) could very well disadvantage another (retirees living on interest payments) that would then feel aggrieved.

Do this often enough and the system devolves into myriad splinter groups clamoring for special treatment and feeling aggrieved and resentful if they don’t get it.

All these issues, both in the financial arena and beyond, have huge implications for our economy and our society overall. They deserve a public airing and spirited debate as we work through the detritus of this recession. I, for one, look forward to it.

Updegrave’s column brings to mind the wonderfully eclectic economist Frank Knight, and a pithy observation he offered in Risk, Uncertainty and Profit – that “All social problems arise out of conflicts of interest, and every judgement touching on social policy involves such comparisons.”

URLs:

http://money.cnn.com/2009/06/08/pf/expert/moral_free_markets.moneymag/index.htm?section=money_latest

http://en.wikipedia.org/wiki/Frank_Knight