The problem is with economic theory itself, or so it seems to me. Here’s what I think —
Adam Smith wrote in “The Wealth of Nations” claimed an “invisible hand” of self-interest would set things right. To that, George Soros comments: “Far from combining all the available knowledge in the market’s movements, as economic theory claims, financial markets are ruled by impressions and emotions.” Setting that debate aside, what do we do in the meantime to ease the suffering? “Nothing,” says Ayn Rand, Milton Friedman and their like. “Everything, ” says Karl Marx. “Neither,” say I, for whatever my opinion is worth.
It seems to me that our Founders, in the main, got it right. Jefferson changed John Locke’s “Life, Liberty and Property” to “Life, Liberty and the Pursuit of Happiness.” To my way of thinking, that changes the emphasis from the protection of wealth to the promotion of opportunity. The Preamble to the Constitution proclaims one aim to be “to promote the general Welfare,” but, as far as I know, the Constitution has little to say about wealth, except that it cannot be taken without “due process of law.” Fair enough, and therein lies the crux of the matter: Wealth vs. general Welfare.
It seems to me that there’s a natural tension between the two — and a natural symbiosis. I once wrote re: the free market vs. government regulation: “There is a THIRD way, hellishly difficult to construct, but the only just and equitable solution to man’s inherent greed. It’s the insanely difficult, inevitably tempestuous marriage of the market AND the government.” And I think that applies to general welfare vs. wealth. They must fight it out (natural tension) at the same time as they co-exist (symbiosis). Tough, but doable, don’t you think? Just like my marriage and, I imagine, yours