Capitalism’s most grievous flaws are, at root, problems of property rights and must be addressed at that level.
By Peter Barnes – Capitalism as we know it has two egregious flaws: it relentlessly widens inequality and destroys nature. Its ‘invisible hand,’ which is supposed to transform individual self-seeking into widely shared well-being, too often doesn’t, and governments can’t keep up with the consequences. For billions of people around the world, the challenge of our era is to repair or replace capitalism before its cumulative harms become irreparable.
Among those who would repair capitalism, policy ideas abound. Typically, they involve more government regulations, taxes and spending. Few, if any, would fundamentally alter the dynamics of markets themselves. Among those who would replace capitalism, many would nationalize a good deal of private property and expand government’s role in regulating the rest.
This book explores the terrain midway between repairing and replacing capitalism. It envisions a transformed market economy in which private property and businesses are complemented by universal property and fiduciary trusts whose beneficiaries are future generations and all living persons equally.
Economists wrangle over monetary, fiscal and regulatory policies but pay little attention to property rights. Their models all assume that property rights remain just as they are forever. But this needn’t and shouldn’t be the case. My premise is that capitalism’s most grievous flaws are, at root, problems of property rights and must be addressed at that level.
Property rights in modern economies are grants by governments of permission to use, lease, sell or bequeath specific assets — and just as importantly, to exclude others from doing those things. The assets involved can be tangible, like land and machinery, or intangible, like shares of stock or songs. more>