I recently came across this critical review of Steven Pinker’s book, Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, by Jeremy Lent in the online magazine, Open Democracy. Jeremy makes some good points, but then proceeds dramatically to overstate his case by painting a monothlithic concept of ‘free market economics’ as the enemy of ...
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I recently came across this critical review of Steven Pinker’s book, Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, by Jeremy Lent in the online magazine, Open Democracy. Jeremy makes some good points, but then proceeds dramatically to overstate his case by painting a monothlithic concept of ‘free market economics’ as the enemy of progressives everywhere.
There is no such thing as free market economics. As I point out in Prosperity for All every market economy operates under a set of institutional constraints that determine the rules of the game. While Pinker may also have overstated his argument in places, it is hard to argue with the progress made by free trade and property rights in catapulting 1.5 billion Chinese out of poverty. The absolute income gains of Chinese peasants may not be as large as those of fortune 500 billionaires, but they are very real. And they were delivered by a move from central planning to a free market economy, and most importantly, by a recognition of the importance of property rights.
In his review, Jeremy downplays the gains of free markets. Instead, he brings us a vision of the ‘noble savage’ living by fishing and growing staples on a small patch of land which is then appropriated by mega corporations. Most of us would rather live as the median person in the wealth distribution in a modern industrial society than as a peasant farmer in a preindustrial utopia that has never existed outside of the minds of a few idealistic fellow travelers.
Capitalism does not deliver equality of outcomes. If our current institutional arrangements lead to a socially unacceptable degree of inequality, the right response is to change the institutional structure within which markets operate. It is not to give up on market exchange. And if there is a social consensus that the benefits of higher living standards are endangering the planet, the solution is to adapt market institutions not to destroy them.
In the twentieth century, inheritance taxes on large estates made a dent on the wealth distribution and to a seismic change in social relations. In the twenty-first century, Jeremy Lent rightly points out that social norms have evolved, and are evolving, rapidly. I for one, believe that some degree of inequality of outcomes is both inevitable and desirable as the cost of individual freedom. The ‘right’ degree of inequality is a question to be solved through open debate and institutional reform, not through a western replay of the Cultural Revolution.