Ill Fares the Land Read Online Free PDF

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    Whether or not these propositions hold any truth is not my concern here. No one today could claim with a straight face that anything remains of the so-called ‘efficient market hypothesis’. An older generation of free market economists used to point out that what is wrong with socialist planning is that it requires the sort of perfect knowledge (of present and future alike) that is never vouchsafed to ordinary mortals. They were right. But it transpires that the same is true for market theorists: they don’t know everything and as a result it turns out that they don’t really know anything.
    The ‘false precision’ of which Maynard Keynes accused his economist critics is with us still. Worse: we have smuggled in a misleadingly ‘ethical’ vocabulary to bolster our economic arguments, furnishing us with a self-satisfied gloss upon crassly utilitarian calculations. When imposing welfare cuts on the poor, for example, legislators in the UK and US alike have taken a singular pride in the ‘hard choices’ they have had to make.
    The poor vote in much smaller numbers than anyone else. So there is little political risk in penalizing them: just how ‘hard’ are such choices? These days, we take pride in being tough enough to inflict pain on others. If an older usage were still in force, whereby being tough consisted of enduring pain rather than imposing it on others, we should perhaps think twice before so callously valuing efficiency over compassion. 3
    In that case, how should we talk about the way we choose to run our societies? In the first place, we cannot continue to evaluate our world and the choices we make in a moral vacuum. Even if we could be sure that a sufficiently well-informed and self-aware rational individual would always opt for his own best interests, we would still need to ask just what those interests are . They cannot be inferred from his economic behavior, for in that case the argument would be circular. We need to ask what men and women want for themselves and under what conditions those wants may be addressed.
    Clearly we cannot do without trust . If we truly did not trust one another, we would not pay taxes for our mutual support. Nor would we venture very far outdoors for fear of violence or chicanery at the hands of our untrustworthy fellow citizens. Moreover, trust is no abstract virtue. One of the reasons that capitalism today is under siege from so many critics, by no means all of them on the Left, is that markets and free competition also require trust and cooperation. If we cannot trust bankers to behave honestly, or mortgage brokers to tell the truth about their loans, or public regulators to blow the whistle on dishonest traders, then capitalism itself will grind to a halt.
    Markets do not automatically generate trust, cooperation or collective action for the common good. Quite the contrary: it is in the nature of economic competition that a participant who breaks the rules will triumph—at least in the short run—over more ethically sensitive competitors. But capitalism could not survive such cynical behavior for very long. So why has this potentially self-destructive system of economic arrangements lasted? Probably because of habits of restraint, honesty and moderation which accompanied its emergence.
    However, far from inhering in the nature of capitalism itself, values such as these derived from longstanding religious or communitarian practices. Sustained by traditional restraints and the continuing authority of secular and ecclesiastical elites, capitalism’s ‘invisible hand’ benefited from the flattering illusion that it unerringly corrected for the moral shortcomings of its practitioners.
    These happy inaugural conditions no longer obtain. A contract-based market economy cannot generate them from within, which is why both socialist critics and religious commentators (notably the early 20th century reforming Pope Leo XIII) drew attention to the corrosive threat