Boston ö Economic analyst Robert Kuttner takes on todayâs ãeconomic fundamentalistsä who claim society would be a better place if everything in the economy were more like a perfect market -- without the pesky interferences of things like public education, social institutions, taxes, government and democracy.

      With wit, clarity and real-world examples, Kuttner demonstrates that when everything is for sale, it not only undercuts the basic bonds of a democratic society, itâs also bad economics. He urges us to make a place for the market, not let the market crowd out everything else we believe in, including fundamental American ideals, including democracy itself. Working from real world examples, Kuttner argues that responsible social policy is good economics and a pragmatic ãmixed economyä serves both.

      For over twenty years, Kuttnerâs been writing about the intersection of politics and economics. He resists arguing over the values he does not share with todayâs radical individualists. Instead, Kuttner demonstrates that a night watchman state -- where the only thing the state does is enforce property rights -- itâs not even optimal economically. Examples: it would NOT be good for the economy to let polluters do whatever they want; it would NOT be good for the economy to fail to educate the next generation; it would NOT be good for the economy to fail to vaccinate kids; it is NOT good for the economy when health care providersâ allegiance is to the bottom line instead of the patient.

      Kuttner argues for the economic predictability a tighter social contract between ordinary people and business would yield. He calls ãfalseä the association now made between job insecurity and technological dynamism. ãWhen the economy is in a swing toward radical individualism -- like now -- the need for community is denied. Politically and intellectually and historically, the pendulum swings between an embrace of the ideal of the market, then recoils against market excesses. We must restore a balance.ä

      Markets do some things very well (Kuttner cites restaurants). But he explains how probably half the economy doesnât work as a perfect market -- for example, monopolies, research, vaccinations, politics, the news media. ãPeople are not stupid. But they are cynical. You have to have rules. In a democracy, legislation creates the rules. We need to put money and markets in their place. Real people are not characters in an economics textbook. Economics and politics are inseparable.ä

      And some things should never be for sale.

Conversation 1

Robert Kuttner, in conversation with Paula Gordon and Bill Russell, describes the ãnew economy.ä He suggests people who cherish community and predictability are no less diligent than those who live within the entrepreneurial myth. He argues institutional turbulence -- mergers, acquisitions and bankruptcies -- are not necessary for creativity and dynamism.

Conversation 2

The market model is particularly ascendant right now, says Mr. Kuttner. As todayâs economy swings toward radical individualism, the need for community is denied. Institutions are understood purely as instruments of egoism and material satisfaction, rather than parts of a community. Mr. Kuttner describes his twenty years of writing about the intersection of politics and economics. He recounts Americaâs history as a swing of the pendulum between an embrace of the ideal of the market and then a recoiling against the excesses of the market, bringing us from the days of the Robber Barons to the change which took place in the 1970âs, when todayâs economic fundamentalism took root. He describes realms where markets work beautifully, where they donât work very well, and still others which are in between. ãOne size does not fit all. If you tried to run the entire economy as a pure market, terrible things would happen.ä

Conversation 3

Mr. Kuttner avoids unresolvable arguments concerning values, preferring to look at the economic outcomes of radical individualism. He describes ãexternalitiesä -- costs or benefits -- which are not captured in transactions. A discussion ensues about the adherence of current academic economists to first principles that cannot be challenged -- ãtheology.ä Todayâs assertions and economic models underestimate the complexities of people and their lives. ãThe Chicago School of economicsâ view of human nature is about 300 years out of date.ä Bill Russell suggests this approach resembles a ãdegenerate form of Marxism.ä Unfortunately, Mr. Kuttner asserts, students must imbibe a set of received truths in order to be credentialed as an economist and much of what passes for economics today has no empirical content whatsoever.

Conversation 4

Economics and politics are inextricably linked Mr. Kuttner reminds us. Political life is the way business in a democracy is carried out. Some would say democracy is a good word, politics is a bad one. ãYou canât have democracy without politics. If you want the one, youâre going to have the other.ä Mr. Kuttner describes what happens in health care, education and the labor markets when the market model reigns supreme. Ordinary people may have more wisdom than experts about economics he contends. ÊThey donât like it when reciprocal obligation and loyalty go down drain for the sake of idealized concept of marketplace. ãReal people donât like being treated like characters in an economics textbook.ä

Conversation 5

Market principles can be used to achieve social objectives in some parts of the economy Mr. Kuttner believes. Technology makes possible a great deal more choice, but if we donât have rules, choice evaporates.ÊÊThe telecommunications and airline industries offer examples. Mr. Kuttner reiterates, ãOne size does not fit all.ä And yes, businesses in a lot of industries are afraid of real competition. He describes the trespass of market principles into the political economy and into the media. He argues forcefully for radical campaign finance reform. We must put money in its place, he says, restore power to ordinary working people not to have their lives turned upside down at the whims of corporations. ãJust when you think the pendulum is stuck, it swings back. This is still a democracy and I think it will swing back.ä

Conversation 6

We can debate which things ought to be provided to us as citizens and which things ought to be for sale to us as consumers, says Mr. Kuttner. But somewhere thereâs a boundary, he believes. Our human interests, wants and needs, cannot simply be reduced to linear calculations of material satisfaction.

Acknowledgements