The focus of our May 15 discussion was Economics and Democracy. We considered the influence of economics on democracy through the ages, with a special emphasis on Milton Friedman of the (University of) Chicago School, versus the modern progressive economics of Robert Reich and others.
The cover of our packet had a quote from The Future of Democracy:
Our packet included quotes from The Wealth of Nations by Adam Smith. Despite being known today as a champion of the free market, Smith was concerned about the plight of the common man. He promoted equal justice for those of all economic levels at a time before the establishment of modern democracy:
Milton Friedman, probably the most famous economist that came out of the Chicago School, has been a champion of “conservative” politicians from his day up to the present. He was an advisor to Ronald Reagan and Margaret Thatcher. The history of the Chicago School goes back to its 1892 founding by John D. Rockefeller, who ran Standard Oil, and who was the wealthiest man in US history. He promoted laissez-faire (non-interference) economics via organizations he supported.
Friedman’s 1962 book, Capitalism and Freedom, still is echoed by modern conservatives such as Paul Ryan. He was one of the original promoters of monetarism, under which the government pumps money into the economy (via banks) as needed to maintain a fluid economy. His theories can be summed up in the following quote from his book:
In other words, maintaining individual freedom is based on limiting regulation and allowing the market to establish a fair economic playing field. According to Friedman, government must be limited to its absolute minimum function to allow the natural competitive nature of capitalism to take place, which ultimately produces the best and fairest results.
Robert Reich, on the other hand, in Saving Capitalism for the Many, Not the Few, tells us that capitalism needs government regulation to survive. Government sets the rules that protect the interests of those at all levels of society. The problem is that those who have most access to the politicians who set the rules are those who support their campaigns and allow them to stay in office. They are, of course, those with the most money. Those who run large financial firms such as Goldman Sachs are the same people who supply funds for those who run for office and who end up in the cabinets of US Presidents of both parties.
We also briefly reviewed a few other books including On Ethics and Economics, by Amartya Sen, the Nobel Prize winning Harvard economist, who states: “I would argue that the nature of modern economics has been substantially impoverished by the distance that has grown between economics and ethics.” In The Moral Consequences of Economic Growth, by Benjamin Friedman, the essential premise is that investing in improving the skills of those at the bottom level of society ultimately saves money by creating productive citizens, and that having great financial divisions actually creates a drag on the entire economy.
In Economics and Democracy II, we will work toward conclusions on how economics can contribute to a more equitable society that benefits those at all levels.
Please recommend this newsletter to people who you think might appreciate it. If you want to be added to the list to be notified when a new newsletter is posted, fill out our contact form and check the box just above the SUBMIT button. You may also use that form to be removed from our list.
The Future of Democracy can be ordered wherever books are sold.
Click ↓ (#) Comments below to view comments/questions or add yours. Click Reply below to respond to an existing comment.
Steve Zolno is the author of the book The Future of Democracy. He graduated from Shimer College with a Bachelors Degree in Social Sciences and holds a Masters in Educational Psychology from Sonoma State University. He is a Management and Educational Consultant in the San Francisco Bay Area and has been conducting seminars on democracy since 2006.