Reference no: EM131915909

Question: Purpose: What Do We Hope to Accomplish?

Until this point, we have provided a brief reminder of some of the big challenges facing America's capitalist system. The balance of this chapter more carefully examines the philosophical nature of free market capitalism, introduces some alternatives to the free market, and asks where America's political economy is headed. Chapter 1 thereby serves as a foundation for the book's detailed investigation of the following questions:

1. What is the proper ethical/social role of business in American life?

2. How much, if any, government regulation of business is necessary to secure that role?

Markets and Governments

We certainly cannot understand America's system of laws without a firm appreciation for the principles of capitalism from which those laws spring. We have embraced an evolving capitalist, democratic approach to life. Other cultures have placed less faith in the market and more in government planning. In this chapter we will explore the full economic spectrum, moving from a laissez-faire, free market approach on the extreme right to a brief reminder of command economy principles on the far left. The bulk of our attention, however, will rest where the world is at this moment. Most nations are practicing varying combinations of markets and rules that we can label mixed economies. The pure free market approach assumes that we can operate our business system and our society at large free of all but foundational legal mechanisms such as contract and criminal law.

The wisdom of the market-our individual judgments, in combination with our individual consciences-would "regulate" American life. Most forms of government including regulatory agencies, consumer protection, environmental rules, occupational licensure, zoning restrictions, antitrust law, and all but the most basic government services would be eliminated. Of course, today's global debate is not so much about capitalism versus communism as about the mixed economy-that is, about what combination of capitalism and government best serves the needs of America and the world. Substantially open markets have shown themselves to be the stronger vehicle for productivity, efficiency, and personal freedom. Are open markets also the stronger vehicle for improving living conditions for all citizens, for maximizing democracy, for discouraging crime and corruption, and for building strong communities? Are America and the world best served by the speed and efficiency of largely unrestrained markets, or do we still need the "civilizing" influence of government rules?

Law: Finally, this chapter should be read as a platform for the study of law that commences in Chapter 4. Once a society settles on some broad political and economic principles, it employs the law as a primary method of social control. So to understand the law, we need to understand its roots in the economic, political, and social preferences of America and the world.

Questions-Part One

1. The John Templeton Foundation recently asked a number of prominent thinkers the following question: "Does the free market corrode moral character?" Answer that question.

2. Former Iranian President Mahmoud Ahmadinejad in 2009 said a "new era is starting" after the "definite defeat of capitalism."22 Is capitalism dead (or dying)? Explain.

3. Scholar Robert Skidelsky applauds capitalism for overcoming scarcity, organizing production, and lifting many out of poverty, but he thinks capitalism, at least in rich countries like the United States, has also produced a culture where our main occupation has become the production and consumption of unnecessary goods. He asks whether capitalism can succeed if it continues to produce "more of the same, stimulating jaded appetites with new gadgets, thrills, and excitements? Do we spend the next century wallowing in triviality?"23 What do you think?