Thank you for publishing the guest column by E.J.Dionne last Sunday. While he makes a good argument for the liberal point of view, he only covers part of the rationale of liberalism. As distinct from 18th century liberalism, which was liberation from the dated economic strictures of the feudal economy, modern liberalism focuses on the shackles of class and income. FDR and his advisers did not blame the poor, black, brown or white, for their poverty. They correctly analyzed that all humans are imperfect and all human enterprises are also imperfect, even the “free market.”
European economists like Frederich Hayek worried about the absorption of an economy by a tyrannical political system and claimed that government power over a “Free Market Economy” leads to complete dictatorship. Their experience with Hitler and Stalin made that a fearsome threat, but Hayek did not accept that government regulation is necessary in a market because capitalists themselves are human beings. He warned against allowing electoral pressures to influence or control free markets. I.e., he opposed voters’ setting economic policy. He was not democratic.
The liberal argument in the U.S. has been struggling against the European view since Milton Friedman adopted Hayek’s point of view. The liberal will argue that since all human are fallible and subject to the same seven deadly sins as the rest of us, a democratic government should enact rules by which a free economy operates in the public interest. Friedman made the astonishing claim in his book "Capitalism and Democracy" that the only purpose of the corporate leader is to make money for his/her shareholders. No social or economic idea of fairness dents that armor.
The result in the U.S. since the 1980s shredding of market regulations like consumer protection, environmental protection and workers’ welfare has been an economy run by people with only one goal: more money. In theory, competition produces the best product at the best price. The reality has been a drive toward monopoly, total dominance of market share, shareholder profits as a paramount goal, with the consumer left to exercise “choice.” The results are now being blamed for the high degree of instability in the US, blamed on inequality. But it is the result of the adoption of a faulty economic model that focuses solely on the benefit to shareholders, who then reward corporate leadership for exorbitant profits. The public be damned. That is the other side of liberalism that needs more discussion.
HARRIET H. YOUNG