I believe in markets.
Healthy markets.
Too often, on so-called liberal / progressive blogs, I read commentary that simply blasts generically and gratuitously blast "capitalism."
Can one be a good liberal and believe in business?
I thinks so. I teach accounting and business law.
It's one thing to point fingers. That's easy, but it will only get us so far.
It will be quite another to figure out how to fix things.
The ability for people to create healthy enterprises is a good thing. Trade and growth can encourage a community to use its resources both efficienty and effectively.
This does not mean unrestrained chaos -- enterprise without fundamental rules. Unrestrained chaos will create, as we've seen, inefficient results. Yes, those "inefficient" results can be extreme.
To ensure that markets work effectively for the community, certain ground rules are necessary:
First -- truthful, transparent information. Transactions in which one side has all the data and the other side has none creates bad results. Securities trades are a good example. When financial results are based on accounting manipulations, the market makes bad investments. When consumers aren't given adequate labeling, they buy food that's not healthy or products that are dangerous. Truthful information creates healthy transactions that promote growth and markets. This is a big part of the current meltdown. Securities, particularly mortgage-backed securities have been grossly mispriced and based on fraud -- bad information.
Second -- equal bargaining power. Much of our law needs updating, as it assumes face-to-face transactions among equals. How to counteract? Unions are a good example. Anti-trust laws, which have collected a lot of dust in the last 3 decades, were designed to promote competition, the ability of market participants to actually negotiate - have a fighting chance. Perhaps this is the problem with healthcare -- individuals have basically no bargaining power, whatsoever, with private insurance companies.
Third -- allocation of externalities. Enterprises and people must be forced to pay the actual costs of things instead of passing those costs onto taxpayers. Example - pollution enforcement. Forcing coal mining companies to pay for the costs of reclamation, or the costs of asthma, or devistation of fishing waters. Wal-mart's issue of pushing people onto Medicaid could be another example. This is probably the biggest problem with respect to energy. In fact, not only do are markets not enforce energy providers to account for their externalities, but the US government "doubles down" - inviting those companies to shift costs to the taxpayers.
Finally - a safety net that permits the people who fall out by swings in the market due to competition to get back on their feet.