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Memo from Kuttner. Co-editor and co-founder of The American Prospect, Robert Kuttner lectured yesterday at the University of Illinois at Chicago and I had the pleasure of attending his talk entitled "Social Justice in the Age of Markets." It was a great opportunity to hear an economic policy expert talk in the broader context of what’s going wrong with America’s social agenda.

Kuttner mentioned he’s writing a new book on deregulation and the stock markets, and he also recommended a forthcoming Brookings book by Alicia Munnell on the highly suspect accomplishments of the 401(k) pension system.

Here are a few disconnected and paraphrased notes on what he said that I jotted during his talk (I can’t vouch for accuracy — the man talks fast and I write slow):

The free market does not comprehend "compassion" — only "efficiency."

A pure market economy is a social nightmare.

Oscar Wilde said, "A cynic knows the price of everything and the value of nothing," but that’s a better description of a free market economist.

The principal challenges in defeating the laissez-faire mindset are twofold: intellectual and political.

The intellectual challenge is to weaken the two dominant economic myths of "efficiency" and "people get what they deserve."

Real people don’t behave the way free market economic models predict. They’re generous. They help strangers. They value norms of fairness.

Some things are beyond price, beyond markets. Freedom (as opposed to slavery). Healthy infants. Organs for human transplantation.

The political challenge is to get across the idea that we achieve social justice by reining in the markets.

The boom following World War II gave more people more purchasing power than ever before, and was largely on the foundation of government interventions like the GI Bill, the FHA, and similar programs — all of which run counter to free market models.

How should the left rebuild our ethic of social solidarity? (1) Build out from our islands of strength. Rally people to the bulwark of social security — one of the most popular and successfully redistributive programs ever — and proposals for national medical insurance. (2) Attack the opposition. Managed care is a system hated by patients and doctors alike. The only ones who like it are the insurers who profit from it. Managed care shifts costs from employers to employees — effectively removing employers from the social contract for medical care. Half of the prescriptions in the USA go unfilled because people can’t afford to pay for their own medicines.

As Kuttner pointed out, social disaster emanates from the lack of regulation applied to the markets, and from the misapplication of market principles to social needs.

One of the themes of this blog is that vast amounts of power reside in the most boring of details. That’s why I spend so many of your monitor’s valuable pixels on the conflicts of interest among the economic elites that support George W. Bush’s concept of America while they hurt the actual citizens. That’s also why I spend so much time on Enron as the symbol of everything wrong with the direction of this administration. It encapsulates stock market regulation, energy market regulation, environmental policy, globalization, campaign finance reform, corporate and governmental secrecy, the invasion of Iraq, pension reform, accounting vs. consulting, investment banking vs. equity analysis, and a zillion other financial conflicts of interest — not to mention the corporate class warfare of the upper attacking the lower classes. As his thousands of employees scramble to find some way to fund their retirements, former Enron CEO Ken Lay not only remains to be indicted, he still flies first class.

Of the 150 or so in attendance, I may have been the only person there who had no affiliation with education. I went because I'm a regular reader of Kuttner's in his magazine The American Prospect which I probably started subscribing to a year or so ago because of Matthew Yglesias’s blog. Matt is now a writing fellow there and they are evidently glad to have him. In our brief private conversation after the lecture Kuttner had only the highest praise for Matt and told me to watch out for his upcoming print work. I’m also looking forward to Kuttner’s next book.

{ 9:15 AM }

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