Chapter 17 SOME ESSENTIAL REQUISITES

Some essential requisites of a shared market economy still need to be examined. Many of the points made earlier provide context for the additional thoughts. The requisites wont fit every culture. They are important for a future free society in a country like the United States. Other cultures may find much that is valuable in them, but their peoples will want to keep in mind their own history and rich tapestry. I am not intending to suggest a universal model that all peoples should be implored or forced to adopt. The need to continue an active, competitive (albeit reformed) global market economy. The advantages of a market are many. When combined with science, which it supports and applies, it is a key to the vast unlocked progress that lies in store for the future. It should be noted, though, that the call for a continued marriage of science, automation and competitive enterprise embodies a value-judgment in favor of on-going economic and scientific progress. It isnt compatible with an ideology that would oppose all acquisitiveness. The world has seen several such mindsets, ideological or religious. The continuation of a competitive market with the profit motive is far more than just a choice in favor of materialism, as some may supposed it to be. The worlds urgent needs are not the same thing as false values. They speak to survival itself, and beyond that to a desire for a decent life. No doubt people who have the means to enjoy life will legitimately find much pleasure in frivolous, fun-loving things. But it is also possible for life to be raised to more exalted levels, such as in the arts and literature. The goals may include improved health and a longer lifespan. The need, however, to reduce market entities and activities to a manageable size. The post-Cold War international consensus that a competitive market economy is the most effective engine for progress has come to be modified in the aftermath of The Great Credit Crisis of 2007-2009 by a consensus that much reform is needed in how the global market, especially global finance, works. There is some hope that regulation at the international level will be sufficient, but there is reason to think that the flow of literally hundreds of trillions of dollars in international finance and currency speculation, subject to movement at the click of a mouse sometimes impelled by herd psychology, is too large to be contained. If that is so, the scale will need to be reduced and made more local so that central banks and finance ministers can deal with it. In the global market that has come into being in recent years, many institutions and events have grown to a size that outstrips the nationstate. They are no longer susceptible to meaningful policy oversight. Local governments and nation-states, including the central banks of the major economies, have lost control to an immensely energetic, hydra-headed economic dynamo that produces great innovation at the same time it holds out, at any given time, far more than a remote possibility of economic panic and total collapse. Unfortunately, there is no invisible hand to cause world capital flows

to maintain an even keel. This means that the world market lacks one of the essential features in Adam Smiths assessment of a market economy. Economic literature is already discussing the need for relocalization, even deglobalization. In part, this will be a matter of reducing the size of financial and business entities to manageable proportions. Matthew Goldstein in Business Week has mentioned that an option would be old-fashioned trust-busting. Regulators could break off chunks of firms until those entities fit neatly inside national borders. Banks that are too big to fail must now be considered too big to exist, says Simon Johnson, a former International Monetary Fund chief economist.1 It will be intolerable to have the world walking on the edge of a precipice, constantly threatened with a catastrophic fall, even though in the absence of a collapse the system is highly productive. Even small investors, when acting in large numbers, can have a tidal-wave, herdlike effect on a global basis when each individual shifts money in response to the same panic or other psychological impulse. Much thought should be given to how to prevent catastrophe from this source. Perhaps controls imposing a mandated period of holding will help. An author who has given this much attention is William Greider in his 1997 book One World, Ready or Not. He suggested several specific reforms directed at containing the herdeffect of global finance. Here are his recommendations:
1. National governance could be swiftly reasserted over capital and its movements in the old-fashioned way: by taxing it. He pointed to a measure proposed more than fifteen years ago by Yale economist James Tobin: impose a very slight transactions tax on all cross-border flows of capital. Applied at major foreign-exchange centers, a small exit-and-entry toll would slow down the furious pace of global finance.2 2. Governments must resist the temptation to foster easy credit that is routinely extended to financial markets. That is, regulators must reign in the hedging and derivative devices that allow speculators to multiply the size of their plays several times... The margin requirements for purchasing bonds and other financial instruments on borrowed money can be set higher.3 3. In some areas of credit, ceilings on interest rates might also be reimposed, limitations that can curb reckless borrowers and also encourage the flow of savings into worthier, long-term investments.4 4. The world, Greider argues, should stop tolerating the offshore banking centers where capital hides from banking and securities laws. This can be done by prohibiting their own banking systems from honoring the transfers of offshore capital.5 Greider combined his discussion of these proposals with an intelligent refutation of the various arguments about why they cant work. He said they can if the worlds major financial powers have the will to apply them and thereby to back the world away from the precipice that he saw so clearly.6 It is worth noting that in 1997 he accurately foresaw that the measures would not be taken because of the prevailing fixation on financial (and other) deregulation. The Great Credit Crisis of 2007-2009 was avoidable, caused in large part by ideological failure.

The problem of economic displacement will force political units to respond to safeguard the interests of their people. It will be consistent with this at the same time to take such steps as are necessary to restore economic activity to a scale that is amenable to the types of oversight that have so long been found essential. The need to establish a broad distribution of capital-based income to support the population, overcoming the effects of displacement and polarization.

The proposal that is central to this book is consistent with the thinking of Friedrich Hayek, one of the preeminent libertarian economists. This did not keep him from believing that a free society must act to counter the effects of economic dislocation from forces beyond the individuals control. His discussion centered on the trade cycle, which in his day was the main source of dislocation. With that in mind, he favored a system of public relief which provides a uniform minimum for all instances of proved need, so that no member of the community need be in want of food or shelter. And although he had no occasion to foresee sweeping dislocation from non-labor-intensive technology, he provided for that contingency when he favored an even higher level of support where sudden and unforeseeable changes in the demand for labor occur as a result of circumstances which the worker can neither foresee nor control.7 As the world moves further into a chronic oversupply of labor, a shared market economy will address this need. A willingness to use government for a number of necessary or useful purposes. One of the hardest things for conservatives, classical liberals and libertarians to abandon will be the perspective that government is the enemy and that very little that it does can be beneficial. (The better philosophers dont say it quite that way, recognizing that classical liberalism has always counted on government vigorously to carry out the functions it considers legitimate; but it represents a common attitude in the United States today.) The crisis of the market will force the use of non-market political mechanisms that limited government advocates have long considered off-limits. The main call upon government that arises out of the markets crisis relates, of course, to creating a system of distribution. The shared ownership wont come into existence without governments playing a role. Other functions can safely be added if a given people, acting through their political processes, want them. Where work is no longer central and no longer determines what most people do on a day-to-day basis, the people of a given society may prefer ways of life that wouldnt come about through autonomous individual action. For example, the desire may be to maintain an internal market for agriculture, doing so out of cultural preference. The French, say, may want a pastoral tone to their civilization, and to make it possible for millions of their citizens to live a rural life as small family farmers. Such farms wont be economic as the lowest-cost producers if automated farming is putting agricultural products on the world market at extremely low prices. To exist, they will need either to be hobbyist farms that in effect consume the farmers income from the general distribution or other earnings, or to be subsidized, or to be protected from the low-cost competition through tariffs or other charges. In a country with the individualistic heritage of the United States, the people will most likely favor the governments leaving things alone and letting people do what they can on the income each has, acting as individuals or through voluntary associations. But other peoples may prefer something else. If they do, their choice will call for some insulation from the global competitive market. In free trade ideology today, anything of that sort is considered an immoral breaking of the rules of the game. We will be foolish, though, to hold fast to that view of it. A better principle will be to make the central rule of the game be that any nation will participate in the world market to the extent its people want it to. In a world of plenty, economics wont need to be the highest end, even though economic dynamism will still remain important.

There will be far less reason for a belief that any redirection of energies robs the system of the optimum allocation of resources. My earlier analysis showed how the optimum allocation concept is logically fallacious; but even if we substitute for optimum a simple concern about dealing well with scarcity, even that will be less important in the future. Scarcity will exist only in the sense that compares the available means to the infinitely expanding desires that economists talk about. It will not be scarcity for the ordinary things of life. The ground for objection that we are depriving ourselves of additional production will be far less compelling. To put it in economic terms, we can say that the marginal utility of additional production will be lower. Another governmental function may be to provide increased public services, creating more of what is called a commons. Here is what Hayek said on the point: Only the coercive measures of government need be strictly limited [T]here is undeniably a wide field of non-coercive activities of government and there is a clear need for financing them through taxation There is no reason why the volume of these pure service activities should not increase with the general growth of wealth.8 It should be noticed that Hayek did not consider taxation so dangerous an activity that it could not be used to fund the service activities. A strong case will be present for the public provision of the many amenities of advanced civilization, doing much that individuals are not likely to do on their own. One such amenity may be the funding of research and liberal arts centers as a way to maintain universities after distance-learning causes them no longer to be fundable on the basis of student credit-hour production. None of this will violate classical liberal values if the new conditions are taken into account. Certainly much more will be open to political decision than in non-socialist countries today. Statist dangers will need to be guarded against, which will be part of our discussion here; but the use of public resources for objectives the society chooses can serve an advanced civilization well, and even strengthen its peoples immunity from totalitarian abuse. Larger objectives may sometimes be much more conducive to high civilization than purely individual action is. The ancient Greeks, for example, created a sublime architecture. Such cultural cultivation could help dissolve the alienation of the intellectual which has been a central fact in the modern age. One of the causes of the alienation has been that many artistic and literary people have long considered bourgeois society hopelessly mediocre in these dimensions, which they arent wrong in thinking important. If such a higher elevation helps the alienation dry up, something that should also dry up will be the alliance that the established artistic, literary culture has so long sought with unassimilated or disaffected groups. The ideology that expresses this militantly adversarial relationship toward the main culture is what to a large extent explains our present cultures artistic, literary emphasis on dissonance, ugliness and the bizarre. If those ingredients change, civilization may move to a higher intellectual and spiritual plateau, while at the same time a major acid that has been eating away at an individualistically free society will be reduced or even eliminated. At the same time, the broad distribution of economic product should do much to prevent the existence of disaffected groups. Thus, some of the main driving forces toward messianic ideology and even totalitarianism will be lessened. This should allow the society even though it will have a significant additional governmental support role to be much

more accepting toward normal human existence than we have seen during the past two centuries of ideologically-driven appeals to the declasse. It is a mistake to think that the greatest threat to liberty is from governments insatiable impulse to grow. No doubt empire-building and power-seeking will always need to the guarded against. But the great forces on behalf of the growth of state power in the nineteenth and twentieth centuries came from a combination of sociology and ideology primarily from the intelligentsias seeking an alliance with disaffected groups, championing their cause through the use of the state as a liberating mechanism for the weak. This has been the central impulse behind socialism, not the propensity of government to expand. (A qualification is that modern circumstances have been such that much of what the Left has called for would have to have been done even in a purely classical liberal society as part of providing an appropriate framework for a market economy. I might suppose, of course, that they would have been more through voluntary associations and in ways more consistent with market principles and Constitutional limits.) Once the system of broad-based distribution is in place, virtually all of what we know as the welfare state can be abolished. Social Security, Medicare, Medicaid, Aid to Families with Dependent Children, Food Stamps, rental subsidies, public housing, and hundreds of similar programs will no longer be necessary. Michael Levin, writing for the Mises Institute, observes that there are hundreds of overlapping federal, state, and municipal programs for the poor.9 The question will be whether the basic support that is given to all citizens will in some ways leave important needs unmet. If so, there can be a supplemental program or the commons can simply include basic services. In general, however, the apparatus of governmental assistance can be taken down. With it, the intrusiveness of government that accompanies the assistance and the bureaucracies that provide the help can disappear. The American Left has considered crime the product of economic deprivation, while conservatives have attributed it more to moral and character breakdown. The presence of broad-based economic support will put both theories to the test. Economic deprivation will no longer exist; and to the extent that it has played a role in causing crime, the policing function of the state will be lessened, including the need to have as many judges, prosecutors, defense attorneys, public defenders, probation and parole officers, social workers, wardens, jails, penitentiaries, etc. Character issues may increase with vast amounts of leisure, but that remains to be seen. The need which will vary depending upon the circumstances to protect the local economy from competition. We mentioned this briefly in Chapter 3s outline of the elements of a shared market economy, and went into considerable detail about the conceptual issues raised by the long-standing debate between free trade and protectionism in our examination of the elements of market ideology in Chapter 14. It deserves further discussion in a survey of the requisites of a shared market economy. Although a tariff wall violates the prevailing free trade ideology, it can become essential to the interests of a given nation such as the United States if competition from the immense pool of extremely low-cost foreign labor, skilled as well as unskilled, hollows out industry and forces domestic wages far down. Protectionism will also be valuable as a transitional expedient to save jobs while a shared market economy system of pooled

distribution is put into effect, and as a way for a society to implement its choices about what sort of life it wants to see continue. Will protection no longer be needed once the shared market economy is in effect? Free trade thinking would certainly hope not, but we saw in Chapter 14 that Friedrich List had a more mature understanding of the market than free-trade thinking does. Free trade has major strengths that include pressure for competitive excellence and cost-reduction, with the consumers directly benefiting from being able to buy goods and services at lowest cost. But as we review the requisites of a shared market economy, it is worth reminding ourselves that if a country loses its technological and competitive capacity in a given area because its firms prove second-best perhaps only temporarily and only slightly in the competitive struggle, it takes on what may well be an undue subordination. If it retained its capacity in the area despite being second-best, it might rise at any time to being the lowcost producer. Moreover, its firms striving to become number one would be a powerful spur not just to becoming better at existing methods, but toward over-leaping, by-passing innovation. We saw that comparative advantage should be seen not as a one-time thing, but as something dynamic, subject to change over time. But for that, more than one nation needs to retain its competitive capacity. This is increasingly complicated in the world market, of course, by many firms coming to have no distinct national identity. They have investors from many countries, produce and sell in many places, and even have officers who feel no business loyalty to a particular nation. Any attempt to protect and foster domestic industry in order to assure income from capital will have to grapple with this. It isnt necessary in our discussion here to resolve the many issues about how the domestic market economy will best be structured, other than to say that it will be important to look to its health and competitive vitality, and especially to its innovation. The economic crisis that began in 2007 has shone a spotlight on the need for a great many reforms. The issues will include whether government should pursue an industrial policy sponsoring certain firms or industries, or whether it should direct public resources into research, either basic or applied. The rationale for laissez-faire will be much weaker than it is considered to be today, allowing alternatives beyond those envisioned by the pure free trade school. Note, however, that protection of domestic industry from outside competition wont be sufficient in itself. If technology is the key displacer, that will occur within the very same domestic economy that tariffs would protect from outsiders. Protection wont block the main source of decline in employment and earnings. It is this that makes a system of pooled distribution necessary. The need for the system of broad-based distribution to come at the political level at which people feel themselves to be a people, with strong bonds of mutual identification; i.e., in todays world, at the national, and sometimes even the local, level. This imperative toward action at a national or even local level is important so that the system of distribution will actually be established and maintained. Is a system of shared ownership imaginable on a world scale today? It would destroy the advanced economies and thereby remove the engine by which all peoples will eventually gain the means, through technology and capital, to meet the exigencies of the modern world.

This points to the importance of halting the erosion of national sovereignty. The future will need the nation-state as the vehicle for what needs doing. National and local life are also the context within which varied cultural preferences can find expression. In the absence of a sense of shared community, the choices will cause irreconcilable conflict. In saying this, I am presupposing the impossibility, and probably the undesirability, of a completely homogenized world culture. A uniform culture is certainly the tendency caused by the global market with its mass-marketing, cheap transportation, instant communication and mass entertainment. It seems highly unlikely, though, that the peoples within the worlds diverse civilizations are going to want to lose their distinctive ways of life. As a person who identifies with the West, I would certainly hope that the West does not continue on its own path toward dissolution. Many countries are not nations, by which is meant a single people with a shared sense of life. This is especially true in Africa and the Middle East, where the colonial powers established national boundaries for administrative purposes, not caring that in doing so they threw together assorted peoples and tribes. This is why the local level may be important, not just the national one. Of course, the situation matters enormously; a devolution into localism can be destructive if a viable nationhood is possible. The political action forced by the crisis of the market will face major obstacles in situations where agreed-upon political action about things fundamental to the society cant be arrived at peacefully. The former Yugoslavia comes to mind. If there are lessons truly to be learned there, they may have widespread application elsewhere. The need to transcend the closed system of laissez-faire ideology. The great twentieth century classical liberal Wilhelm Roepke didnt limit his philosophy of a free society to what the closed ideological system calls for. He was able to say that the market economy isnt everything. It must find its place within a higher order of things which is not ruled by supply and demand, free prices and competition.10 If that was true before the worlds movement into worker displacement, it will be even more true in the future. The Hayekian thinker Samuel Brittan agrees: The right kind of market economy can be an instrument of human freedom and a way of satisfying human wants A great deal of attention is required to provide the right kind of framework especially the redefinition of property rights and the general rules of the game. Too many free market tracts simply supply reassurance for the believer.11 The wisdom, even at a time when major innovative steps are essential, of a conservative preference for slow, incremental change evolving out of a peoples experience. Traditionalist conservatives since Burke and probably long before him have urged that society change through careful evolution, keeping changes in line with the spirit of the whole. Hayek adopted such a conservative theme when he made this a centerpiece of his philosophy. He argued that many things in society reflect knowledge gained by thousands of people over time, which is knowledge that no one person has. This was for him a reason for caution in making changes. He opposed the sort of constructivist rationalism that considers itself wise enough to substitute its judgment freely for established ways.12 This reminds us again of the intellectual humility that is so important to the theory of a free society. The idea is not to tear everything down, as the Russian nihilist

Nechayev urged, so that everything can be rebuilt. Instead, it is to make necessary changes, but otherwise to follow the medical professions conservative dictum to do no harm. The need to reject any anti-science, anti-technology ideology and to pursue the development of science and technology, putting on them only such limits as are needed to prevent abuses. This recognizes that the world is still a sink of unmet needs. Science and technology can serve people in the most profound ways. Contrary to popular imagination, there is nothing in them that tends inexorably to dehumanization. In fact, the old images of factories with robot-like people manning them, such as were so frighteningly presented by Fritz Lang in his 1927 silent film classic Metropolis, are increasingly out of date. Robots will largely man the factories, but they will be computerdriven machines, not dehumanized people. (A genuine problem at this time is, rather, the inhumane treatment of animals such as pigs in sometimes shocking mass-production factories. This is why the qualification of such limits as are needed to prevent abuses is relevant.) Whether science and technology will continue to be encouraged will depend largely on the attitudes of the worlds religions. As people choose what religion to embrace, it will be important for them to keep in mind that the now greatly expanded world population exists largely by virtue of modern science, technology, economics and medicine. Take those things away, and millions (most likely billions) will die. Civilization will go with them, since they wont go quietly. A society based on Rousseaus state of nature or Theodore Roszaks mysticism (as in his New Left classic Where the Wasteland Ends) can sustain only a small fraction of the people alive today. The possibility that large numbers of people will turn to religions that repudiate science and technology will be much greater if no solution is put in place for the problem of distribution. Without such a solution, people will strike out against what they perceive as the cause of their desperation. The need to make science, technology and production more and more environmentally friendly. I havent been an enthusiast for what is called the environmentalist movement. It initially became popular in the 1960s and featured a heavy-handed anti-capitalist bias (as witness The Environmental Handbook, which spoke of the worms of capitalism, published just before the first Earth Day in the very radical spring of 1970).13 Since then, in its effort to get the worlds attention, it has persisted in exaggerations and the misuse of science itself to make its case.14 This isnt to suggest that there are not a great many sincere and well-meaning people who do support the movement. But no one who cares about the world and loves the wonders of nature will let the exaggerations obscure the importance of preserving and even restoring the environment. Fortunately, the technology that is coming into existence isnt like the old smokestack industries. More and more, science and technology offer solutions, not sources of further pollution. For those who are willing to look far enough ahead, consider this futuristic scenario: When farming comes to be done in laboratory-like indoor automated farms, virtually the whole world will become available as a park. This will encourage an even greater reverence for and enjoyment of nature.

The need for vigilance to prevent the rise of a dominating technical or intellectual elite, or an elite based on extreme wealth. Richard Herrnstein and Charles Murrays The Bell Curve pointed to the growing polarization within American society based on intelligence.15 This is related to Information Age technology. The economy becomes more and more a matter of applied science and technology, with the result that the coming age will increasingly be the heyday of bright, often brilliant, people. The existence of a technical elite will be unavoidable, while at the same time there will be the growth of what is today called the jet-set elite based on the incredible fortunes that the most successful players in the worlds mass market are able to reap. Moreover, we have experienced two centuries during which the subculture of the world intelligentsia has sought class power, to use the words selected by Konrad and Szelenyi in their book The Intellectuals on the Road to Class Power (to which we have referred previously) after years of observing Communism in Eastern Europe and the old Soviet Union. There may be a continuing impulse in that direction even though some of the causes of the long-standing alienation of the intellectual should disappear. The result of these various tendencies may be the rise of a powerful elite or of contending elites. (In fact, it isnt necessary only to speculate about the future in this regard; a global elite of the superrich and well-connected already exists, with one of its names being, as we have seen, the Davos culture.) If the elites seek allies outside their own ranks, or otherwise mobilize their resources, we could see a phenomenon similar to the Left in the nineteenth and twentieth centuries. History shows how possible, even likely, it is for elites to grow that see themselves as better than the rest of humanity. When that happens, domination and exploitation become realities. Such an elite feels its place rightful and normal; those outside it often acquiesce, allowing themselves to become persuaded of the same thing. This was the context for classical liberalisms long struggle against the class-structuring that typified the Old Regime in Europe. The Enlightenment gave rise to the late-eighteenth century sensibility against slavery and the slave trade. These are precedents for an opposition to class hierarchy by the future heirs to classical liberalism. Ironically, in light of the positions taken by the ideologies in America, inheritance taxation can play an important role precisely for the classical liberal purposes of assuring a society of individual freedom and limited power. An estate tax is imposed on a total estate based on its size; an inheritance tax is concerned with the size of the fortunes left to the various legatees, and levies taxes that would limit how much each is given. An inheritance tax isnt against wealth per se, but helps spread it among many individuals, preventing vast accumulations. Two centuries ago, classical liberalism fought the rule of primogeniture by which estates were handed down to the eldest son so that they wouldnt be divided. An identical issue will be posed with regard to the passing of enormous wealth within families from generation to generation. Preventing an hereditary elite is especially important. The continuation of a competitive market economy will also help. It will constantly raise up newly-successful people and cause the decline of other fortunes. At the same time, the Spanish philosopher Jose Ortega y Gasset was right when he said in The Revolt of the Masses that the tone of a civilization depends upon the aristocratic principle. An ocean of mediocrity is spiritually and intellectually deadening, and sucks the best out of life. How can the aristocratic principle and an aversion to class hierarchy be reconciled? That is for us to discuss next.

The need of a free society for an intellectual culture appropriate to itself. This is something I have stressed in my writing for many years (in which I have reiterated a point made by John Stuart Mill in his essay On Bentham and Coleridge). We can broaden this to say that it needs an elite, not just an intellectual culture, appropriate to itself. What I mean by this is one that is attuned to the core values of the society and is committed to an elevating relationship with it. Again, economist Wilhelm Roepke, writing in 1960: Every society should have a small but influential group of leaders who feel themselves to be the whole communitys guardians of inviolable norms and values and who strictly live up to this guardianship. What we need is true nobilitas naturalis. No era can do without it, least of all ours.16 It will help if there are underlying forces conducive to such an elite. Such forces seem absent at the present time, but without them the free societies of the future will have a particularly difficult challenge. Who will provide it? Contemporary America doesnt lend itself to confidence that anybody will. Most people, though wonderful in many ways, are apathetic and conformist when they are comfortable. This amounts to a profound morbidity for a democracy. It will help to be conscious of the problem but even then it will be a daunting task. That a zero sum game will exist that will require care to handle equitably. Ludwig von Mises spoke of the Montaigne Dogma, since Montaigne held that the gain of one man is the damage of another; no man profits but by the loss of others.17 In modern game theory today, the same tradeoff is called a zero sum game. In the theory of the transaction that makes up part of free-market theory, as we saw in Chapter 12, each person is seen to benefit from a voluntary exchange. If either party didnt see his position as being improved, he wouldnt enter into the transaction. It is thought that when millions of such exchanges occur, you have an economic system to which the Montaigne Dogma or zero sum game concept doesnt apply. Over a century ago, the German Historical School countered that this extension from the micro to the macro isnt entirely true. By opting for a market economy and a bourgeois commercial society, there was a preclusion of other cultural alternatives. It isnt necessary to resolve that difference here. It is enough to see that we are coming to a world in which the Montaigne Dogma will apply. A broad-based system of income distribution will be necessary; and cultural choices will become possible that can differ from what autonomous individual behavior might lead to. With regard to each of these, the choices the body politic makes will in fact preclude other choices. Such preclusion occurs in any system of political decision, as Mises would agree. It is mitigated, of course, to the extent the economic pie grows, since issues of priority are then easier to resolve. The need to prioritize choice increases the possibility of conflict. This makes all the more necessary an ethos that demands an equitable treatment of everyone in the society. Value-judgments will be inescapable, but wisdom dictates that they be fashioned to secure legitimacy i.e., overwhelming assent to the resulting social order. For this, it is almost certainly necessary that the polity have a strongly homogeneous citizenry. A multicultural society will have great difficulty resolving issues of social equity.

This feature that one thing precludes another has important implications for immigration. In the creation of the shares of ownership in a shared market economy, each person will in effect be entitled to a flow of income from the total of index mutual fund shares held by the independent distributing agency. Each new person sharing in this will dilute everyone elses share. In todays society, each immigrant automatically shares the benefit of all that has been spent before on infrastructure (highways, parks, etc.). This will be magnified if coming into the society means participating in the shared ownership. It is only mitigated to the extent the immigrant increases the overall economic product. This will become increasingly difficult for all but the most skilled to do as we get into a relatively work-free age. And there are subtleties to be faced about what is equitable by way of shares, even for those who are citizens. What about children? Should a couple with seven children have nine units of the common fund compared to only three for a couple with one child? What about single-parent families? Should four people living together have four shares, while a person living alone has one, even though the costs of living will differ greatly? Will people in all geographical areas receive the same? Decisions about such issues as these will have to be made, and the way they are resolved will almost certainly change over time. Because they are not subject to market solution, they are fundamentally political decisions. This makes a political mechanism that reflects the publics will and operates through the Rule of Law especially important. That the long-standing debate between freedom, equality and security will take on new meanings. Classical liberals and others with related views have long objected to the socialist use of the word freedom to refer to anything that is desirable. They have felt that the word should be reserved to minimizing coercion and limiting the power of the state. But the definitional issue need not obscure that there are other senses of the word freedom that are important to people. Such things as freedom from fear and freedom from want are immensely desirable objectives, whether the word freedom fits or not. Supporters of an individualistic free society have sought those objectives, but have much preferred the market economy to state action as the way of accomplish them. Now they can be realized in a shared market economy by an interplay of the economys productivity and the broad distribution of income. One of lifes realities at all times in the past has been that no person really has freedom, in a personal sense that means so much to people in their lives, unless he has the means to be free of the whims of others. In this context, only the independently wealthy are truly free. Under the shared market economy, everyone will have that independent wealth. This will enhance individual autonomy in a way that most people feel especially valuable. The absence of dependency should, taken by itself, vastly improve the quality of life and of human relationships. Equality in its best sense will have been attained. All citizens will live on a level of self-sufficiency. Such differences in income and property as exist wont be in their faces as a reminder of deprivation. If there is a resolute consensus against a total leveling and for prevention of a caste system, the shared market economy will serve the ideal of equality extremely well.

Much the same can be said for security. There will no longer be a dichotomy sharply dividing security from freedom. A craving for too much security has been seen as something that suffocates the risk-taking that is needed for a dynamic, productive life. But this truism has for many obscured the fact that security in person and property is another name for stability in the things people care about. It is a vitally important human value. In a shared market economy, this stability will exist while leaving individuals unobstructed in their pursuit of their own objectives. Intellectual independence will also be served. Up to now, many of the people who deal in ideas are beholden to others for their living. It would be surprising if most did not mold their thinking to whats agreeable to the think-tank, university discipline, journal, employer, or whatever, they work for. When they are no longer economically dependent, many may feel more inclined to form their own views. This can lead to an effusion of intellectual effort. That the transition to a shared market economy will require careful attention. Its primary prerequisite is intellectual for policy makers and the public to grasp the full scope of the economic changes sweeping the world, and for them to come to some consensus about what is needed to meet the challenge of vast displacement as non-laborintensive technology advances. Whether we like it or not, we are all invited on an intellectual odyssey. Political parties will need to change their platforms and programs, or be replaced by political movements that reflect the new realities. Specific measures will be needed to address the hardship caused by displacement before the shared market economy can be put into place. (These will largely coincide with what is to be done to meet such crises as the Great Credit Crisis of 2007-2008.) Some measures will no doubt attempt to reinstall people into jobs, such as by retraining. Shorter work weeks and the abolition of overtime may be called for. But it should be kept in mind that they wont serve long-term purposes except to the extent they help establish the solution of shared ownership. It wont hurt for the transition to occur slowly (except that it needs to stay well ahead of the rising desperation). The shock of change everywhere and in all things will shake the very foundations of our personal lives and of our social existence in the years to come. We need time to adapt, but will have precious little of it.

ENDNOTES

. Matthew Goldstein, Battling Too Big to Fail, Business Week, May 18, 2009, p. 43. . Willaim Greider, One World, Ready or Not (New York: Simon & Schuster, 1997), p. 257. 3 . Greider, One World, p. 318. 4 . Greider, One World, p. 318. 5 . Greider, One World, p. 318. 6 . See Greiders discussion at several points: One World, pp. 257-8, 263-4, 291, 316-319. 7 . F. A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1960), pp. 300-1. 8 . Hayek, Constitution of Liberty, p. 257. 9 . Michael Levin, Rethinking the Poor, The Free Market, published by the Ludwig von Mises Institute, August 1996, p. 1. 10 . Wilhelm Roepke, A Humane Economy: The Social Framework of the Free Market (Chicago: Henry Regnery Company, 1960), p. 6. 11 . Samuel Brittan, A Restatement of Economic Liberalism (Atlantic Highlands, NJ: Humanities Press International, Inc., 1988), p. 309. 12 . Hayek, The Constitution of Liberty, especially chapters 2, 3 and 4. 13 . The Environmental Handbook, Garret de Bell, ed. (New York: Ballantine Books, 1970). See page 2 for the worms of capitalism statement. 14 . See my article, Global Warming: A Lysenko-Like Challenge to the World Scientific Community, Conservative Review, July/August 1996, pp. 7-16. 15 . Richard J. Herrnstein and Charles Murray, The Bell Curve: Intelligence and Class Structure in American Life (New York: The Free Press, 1994), especially Chapter 21. 16 . Roepke, A Humane Economy, p. 130. 17 . Ludwig von Mises, Human Action (New Haven: Yale University Press, 1949), p. 660.
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