Better Prosperity: On Justice and Affluence in America

By Steve Soderlind

This timely and thoughtful volume tracks the American experiment with special attention to justice and prosperity. Its wide-ranging survey begins with historical notes and culminates with reflections on twenty-first century chaos and confusion. Lies, fabrications, and simplistic thinking now complicate and confuse the nation—to the despair of millions. In that light, this essay imagines frontiers of justice, based on truth and intelligence, that might kindle a workable consensus and a brighter era of affluence. Referencing germane insights from economics, sociology, psychology, and social choice, the issue is whether justice and prosperity might come together in a virtuous cycle. The author is cautiously hopeful, noting barriers and obstructions that are likely to threaten any such blossoming.

While assessing issues of the day, the author ponders several enduring questions:
• Does prosperity thrive best with minimal, timid government?
• Can a new social norm, more devoted to justice and less to unfettered liberty, lead to a workable political consensus?
• Might a blossoming of fresh thinking bring America back to the table of respectful compromise?

In the end, all Americans operate in a constitutional setting, and in that context, everyone participates in shaping the nation and its prosperity. Join the author as he considers how we can promote a more truthful and respectful brand of capitalism.

• Language: English
• Publisher: Archway Publishing
• Release date: Aug 17, 2022
• ISBN: 9781665727365

Steve Soderlind

Steve Soderlind is Professor Emeritus at St. Olaf College, Northfield, Minnesota. Over forty-some years of teaching, he specialized in urban and regional economics, history of economic thought, and social choice. He also led international travel studies and taught across the curriculum in statistics, great works, and history of science. His degrees include a BA in mathematics and economics from the University of Minnesota and a PhD in economics from the University of Massachusetts at Amherst.

Book preview

BETTER

PROSPERITY

ON JUSTICE AND

AFFLUENCE IN AMERICA

STEVE SODERLIND

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Copyright © 2022 Steve Soderlind.

All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical, including photocopying, recording, taping or by any information storage retrieval system without the written permission of the author except in the case of brief quotations embodied in critical articles and reviews.

Archway Publishing

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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

Any people depicted in stock imagery provided by Getty Images are models, and such images are being used for illustrative purposes only.

Certain stock imagery © Getty Images.

ISBN: 978-1-6657-2735-8 (sc)

ISBN: 978-1-6657-2734-1 (hc)

ISBN: 978-1-6657-2736-5 (e)

Library of Congress Control Number: 2022913585

Archway Publishing rev. date: 08/17/2022

CONTENTS

Preface

Introduction

PART 1: SETTING

Chapter 1 Enlightenment Roots

Chapter 2 Liberty and Justice

Chapter 3 Whence We’ve Come

Chapter 4 Concerning Prosperity

Chapter 5 Twenty-First-Century Disarray

PART 2: CHOOSING JUSTICE

Chapter 6 The Example of Consumer Protection

Chapter 7 Concerning Government

Chapter 8 Social Economics

Chapter 9 Exemplars

PART 3: FRONTIERS OF JUSTICE

Chapter 10 Classical Laissez-Faire

Chapter 11 Distributional Justice

Chapter 12 Race and Gender

Chapter 13 Regional Disparities

Chapter 14 Intergenerational Justice

Chapter 15 Environmental Justice

PART 4: INSTRUMENTS AND BARRIERS

Chapter 16 Instruments

Chapter 17 Obstructions: Falsehoods, Polemics, and Ideologies

Chapter 18 On Social Evolution

Chapter 19 Misconceptions

PART 5: ENVISIONING PROGRESS

Chapter 20 Mill’s Anticipation

Chapter 21 Justice in Economic Theory

Chapter 22 Goals and Outcomes

Chapter 23 Government: Large/Small, Assertive/Timid

Chapter 24 Better Prosperity

Bibliography

PREFACE

This book invites readers to examine justice and prosperity in America. It arises against a backdrop of social division, presumed trade-offs, and concern about invasive government. As a primer, it will introduce fundamental concepts and leave readers with plenty of issues to ponder: How should justice vie with liberty in shaping our nation’s prosperity? Can a blossoming of justice save America from political polarization and paralysis? Is it true that prosperity matches best with minimal or timid government?

Approaching justice and prosperity as goals with constitutional government and private enterprise as means, the examination will emphasize social and historical context. It will incorporate ideas from eminent thinkers, Adam Smith to Milton Friedman (emphasizing liberty) and Karl Marx to Joseph Schumpeter (emphasizing tumult), not to mention venerable philosophical and theological perspectives, Plato and Aristotle to Rawls and Niebuhr. Beyond historical and intellectual perspectives, the discussion will note social and psychological barriers to justice and prosperity in contemporary America, increasingly important in this era of rising seas and polarizing propaganda. Many readers will be dismayed at the array of challenges on the threshold of greater affluence.

The Trump administration shook the foundations of public policy to make America great again. Unfortunately, it proved to be backward-looking, divisive, and clumsy, leaving the nation close to the brink. President Biden inherited a landscape of division and pandemic, encouraging the nation to build back better. Hopefully this little book will help set the stage for productive episodes ahead.

In the end, all of our institutions—government, law, education, private enterprise, et cetera—operate in a constitutional setting, subject to political review and modification. Legislatures, courts, administrators, corporations, immigrants, clerics, teachers, cops, voters, chefs, and more, participate in shaping the nation and its prosperity.

Steve Soderlind

Apple Valley, Minnesota

June 2022

INTRODUCTION

Two documents from 1776 have framed the American experiment: the Declaration of Independence and Adam Smith’s Wealth of Nations. Each envisioned social gain on the shoulders of liberty from autocratic rule. Together, they set the stage for our constitutional republic and market economy.¹

The experiment has unfolded in history, beginning with the norms and expectations of the eighteenth century. In particular, the Constitution, ratified in 1788, allowed white males to reap disproportionately the benefits of progress, which left plenty of room for a more perfect union. Women, African Americans, and First Nations were sorely disadvantaged at the founding, subjugated and often abused. Heretics, homosexuals, and witches were considered evil beyond the pale.

Building on a favorable climate, vast resources, daring ventures, slavery, and freewheeling markets, economic expansion proceeded to lift economic prospects, but not without amplifying political tensions over federalism and states’ rights. After a bloody civil war, several amendments to the Constitution disassembled the domestic institution of slavery, but even as African Americans won full constitutional citizenship, including the right to vote, they remained subjugated with scant recourse to courts. Pervasive racism led to Jim Crow, KKK terror, and sanctioned segregation as the rights of African Americans were widely overlooked. Meanwhile, women were excluded from voting, contracting, and most professions, held down by the expectation of domestic subservience.

The twentieth century witnessed women’s suffrage, social security, civil and voting rights legislation, and unprecedented prosperity. Title IX raised prospects for young women, but challenges still pestered at the millennium: America’s minorities faced continuing discrimination and resurgent aggression; its prisons were full; and declining rural regions felt snubbed and mistreated by powerful metro areas. Wealth was highly concentrated, and inheritance favored family fortunes into the future.²

The twenty-first century found the nation increasingly polarized over job losses, abortion, immigration, and race. Millions of Americans faced epidemics of addiction, obesity, violence, and infectious COVID-19. And, as if that were not enough, several long-term threats prodded: rising seas, destructive fires, and unprecedented storms. America became fertile ground for social tensions.

On one side, thoughtful conservative leaders continue to press an optimistic vision of small government and free, unregulated markets, traditionally called laissez-faire.³ They claim to have distilled this practical stand from respected economists, referencing the likes of Adam Smith, John Stuart Mill, and Milton Friedman. They also take heart from astute reflections on Soviet communism associated with Ayn Rand, William Buckley Jr., and Pat Buchanan, to name a few. Lately, they seem inclined to limit immigration, franchise, and the influence of scientific findings on matters from global warming to American history.

On the other side, thoughtful liberals warn that timid government undermines progressive liberty by tacitly condoning racial and gender discrimination, domestic extremists, concentrated power, religious chauvinism, et cetera. Many see the Great Recession and America’s clumsy approach to COVID-19 as nasty consequences of toying with timid government.⁴ Looking ahead, they see consequential problems calling for concerted efforts by energetic governments around the world. Climate change, environmental deterioration, pandemic, and insidious propaganda frighten them.

After the insurrection at the Capitol on January 6, 2021, and given the churn of social tensions, it’s a fair hunch that the nation’s best path forward would be a blossoming of respectful justice. In that light, several questions arise: Can a new balance, more devoted to justice and less to unfettered liberty, gain consensus? Can justice and prosperity be mutually reinforcing, giving rise to a virtuous cycle? Is it the case that prosperity matches best with minimal or timid government? Can a blossoming of justice save America from political polarization and paralysis?

The goal of this little book is to provide a relatively balanced view of justice and prosperity in light of those important questions. As a primer, it surveys a vast territory, spotting grand features and encouraging deeper investigation. Hopefully, readers will appreciate the portrait, questions, and prompts as they investigate in more depth.

This line of inquiry could be crucially important. As John Rawls put it, Laws and institutions no matter how efficient and well-arranged must be reformed or abolished if they are unjust.⁵ Long before, on June 16, 1858, Abraham Lincoln warned more desperately: A house divided against itself cannot stand.

PART I

SETTING

We begin with elements of American identity and history. The discussion will be brief, highlighting trajectories, predicaments, and prospects. A theme of concern will be the role of government in America’s constitutional republic.

CHAPTER ONE

ENLIGHTENMENT ROOTS

A merica arose with a concept—liberty for all—tracing its identity relative to objectionable circumstances in Europe. The preponderance of colonists had crossed the Atlantic to escape religious, commercial, and political obstacles in their homelands. A growing minority, however, had been taken from their homelands to be traded as property in a commercial flow of sugar, rum, and dark-skinned people.

To appreciate the liberty-oriented root of American identity, imagine living under the authority of kings and bishops, supported by philosophers and theologians who touted autocratic leadership as necessary to good social order. Without monarchy, chaos, as the teaching went.⁶ For sake of order, kings could imprison and execute, dukes could conscript, and bishops could ostracize, excommunicate, or worse. Royally licensed monopolies restrained commerce, while religious dogmas strove to dominate thought. The system was perpetuated by inheritance, the conferring at birth of status, occupation, and religion.

Such had been the state of affairs in Europe for centuries, until courageous thinkers began to question. By what right did rulers rule? Why were most families tied to the land on which they worked as serfs under the oversight of higher-ups called lords? Might there be a better social order without aristocrats and established religion? These were dangerous questions.

Enlightenment influencers like John Locke, Jean-Jacques Rousseau, and Voltaire toyed with these questions, imagining a state of nature in which all people were endowed with natural rights.⁷ Could it be that powerful authorities who lorded over their subjects and congregants were violating the natural rights of those they subjugated? What if citizens were free to discern political and religious stands for themselves without fear of retribution or ostracism? The idea of a social contract arose as philosophers imagined the protection of natural rights by legitimate governments empowered by citizens to serve, protect, and enforce agreed laws.

The call for liberty came forth in that context. It was the cutting edge of progressive justice at the time—throwing off the bonds of authoritarianism.

Jefferson grasped the Enlightenment’s call for freedom and optimistically penned the Declaration of Independence, recognizing universal rights with resounding flourish:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

The words still ring with Enlightenment fervor.⁸

Meanwhile, the French term laissez-faire had risen to become a clarion call against royal interference in commerce. Coined by Adam Smith’s friend Francois Quesnay to advocate free trade, laissez-faire caught on as a foundation of economic thought. The idea was to allow freedom of transaction between consenting, self-interested individuals or companies, even when they resided on either side of an international border. Akin to the state of nature—leaving people to themselves—laissez-faire came to imagine the absence of kings, bishops, and royal favors.

But would laissez-faire result in chaos or good order? The question stirred Adam Smith, professor of moral philosophy at Glasgow University and titan of the Scottish Enlightenment.⁹

Building on a radical vision of self-organizing systems, Smith focused on the trajectory of a free people, organized as if by an invisible hand into natural, beneficent commerce. His Wealth of Nations from 1776 imagined a formative role for liberty and self-interest by attacking the so-called mercantile system, dominated in those days by monarchs and church leaders.¹⁰ In particular, he railed against the licenses, tax breaks, and privileges given to producers, retailers, and merchants in that system, siding instead with the nation’s consumers:

Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. This maxim is so perfectly self-evident that it would be absurd to attempt to prove it. But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer.¹¹

In place of the mercantile system, Smith proposed the system of natural liberty, a relatively spontaneous social order ruled by self-interested consumers attended by self-interested producers and suppliers. In brief, he advocated the ascent of competitive markets where profit-seeking producers would serve consumer appetites and where competition would squeeze hard on excessive profits. This remarkably radical proposal celebrated profit and self-interest versus moralistic teachings against selfishness, greed, and acquisitiveness. Smith argued further that greed and self-interest would encourage innovation, division of labor, and falling costs of production. He saw competition as a persistent force, always squeezing at excessive profit, thus promoting justice. And when profits correlated with shortages, they encouraged more production exactly where it would be most desired.

Smith suggested that sovereign consumers and competitive markets would outperform the mercantile order with higher output, lower costs, and a more generous provisioning of the public. England under his system of natural liberty would not be utopia, but it would be materially better off than under mercantile leadership. Powerful players would be a cancer upon natural liberty.

Consumers would assume the lion’s share of control over the national economy, ruling by their free choices. Producers would follow.

The obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.¹²

As professor of moral philosophy, Smith knew that consumers could be whimsical and wasteful—prone to misdirecting resources just as surely as had the kings, bishops, and moguls of the mercantile system.¹³ Being a progressive, however, Smith opted to trust that consumers would be sufficiently responsible and fair-minded to justify his emphasis on the overriding virtues of a natural, self-regulating social order based on human nature and competition. Reasonably responsible consumers would provide sufficient leadership as kings and bishops receded from power.

Extending his progressive vision, Smith proposed many important roles for government, including national defense, public hygiene, highways, bridges, interest rate ceilings, expanded education, and sumptuary taxes on luxuries or unsavory behavior. His fruitful system of natural liberty would thrive even more with good government to enhance a nation’s wealth. Universal education, supported by government, for example, would add to the material well-being of the nation:

But though the common people cannot, in any civilized society be so well instructed as people of some rank and fortune, the most essential parts of education, however, to read, write, and account, can be acquired at so early a period of life, that the greater part even of those who are to be bred to the lower occupations, have time to acquire them before they can be employed in those occupations. For a very small expence the publick can facilitate, can encourage, and can even impose upon almost the whole body of the people, the necessity of acquiring those most essential parts of education.¹⁴

Benjamin Franklin met with Adam Smith several times, and the two intellectual giants got along very well—each appreciating the other’s economic insights.¹⁵ Franklin shared Smith’s optimism about competitive markets, as did Jefferson, but all three were wary of anarchy. People needed protection from one another as well as from kings and foreign enemies; either way, a strong government would be required. With a legitimate government to facilitate justice, a market system would have an important place in progressive society.

Thus, things were set for the American experiment: a constitutional republic with active, lightly-regulated markets, to evolve under the banner of liberty. Starting with the Constitution of 1788, daring optimism took center stage as the likes of Jefferson, Franklin, Madison, Washington, and Hamilton took the reins of a fledgling United States government. They had read and ruminated over history for pitfalls, the Greeks and Romans having instituted republics, only to have them morph into autocratic empires; so, without recent exemplars to emulate, America began its experiment. After a war for independence and a clumsy episode under the Articles of Confederation, the Constitution opened with its famous Preamble. We the people, in order to form a more perfect Union …

In brief, the United States begins with a step forward in terms of justice, promoting liberty, having overthrown the colonial rule of King George III. To this day, many Americans see themselves as revolutionary champions of liberty, their identity widely centering on concepts like liberty, self-reliance, and the rule of law—with creative tensions abounding.

In fact, the nation also arose on a foundation of eighteenth-century social norms: male authority over women, white supremacy, and Christianity over any religious alternative. Given the political realities of the time, the new republic would tolerate brutal slavery, abusive husbands, and a powerful, wealthy elite.

CHAPTER TWO

LIBERTY AND JUSTICE

T he freshly constituted United States of America began operations under the banner of liberty, raised high, but with established patterns of racial and gender oppression. This was a political necessity: no slavery, no deal. As the words liberty and justice are important to this essay, but freighted with ambiguities, this chapter reviews relevant conceptual semantics.

LIBERTY

Liberty involves freedom from control by others. Its opposites are imprisonment and proximate conditions like slavery, brutish oversight, unyielding dogma, confining custom, intimidating neighbors, and abusive government.¹⁶

A more positive depiction of liberty denotes a social environment in which people manage their personal affairs according to free will and assume responsibility for their actions. Of crucial importance, the concept of liberty arises only in social context; it differs from independence because actions under liberty often impact others. Today’s association of liberty with rights must respect human interdependence, weighing one’s right to swing against another’s right not to be hit, for example. People are not independent when their actions affect others.¹⁷

Classical liberty faced two enemies: abusive monarchy and lawless anarchy (belligerent neighbors). Searching for solutions, ancient Greek city-states adopted rule by citizens. Under agreed procedures, the citizens of fifth-century BCE Athens convened routinely to legislate, administer, and litigate—confident that citizen input could countervail abusive or arbitrary power. It was democracy in action. In that context, with attention to community interests, Aristotle extolled the virtue of magnificence, whereby the wealthier citizens of Athens willingly built its acropolis, theaters, and expansive infrastructure. Less wealthy citizens could not achieve magnificence, lacking sufficient funds, but they could attain the virtue of liberality (contributions to community or neighborhood) by civic participation, abiding to law, and raising healthy, respectable children.¹⁸ The word idiot comes from those days, referring to a self-absorbed citizen who accepts the fruits of community but contributes little to it.

Always in social context, liberty calls for clarified boundaries. When can society impose itself on the individual, perhaps requiring desistance or compensation? Anarchists see no problem here, as they do not recognize any legitimate authority over the individual. Libertarians, on the other hand, believing in legitimate governmental authority, face the issue of boundaries. In general, they agree that causing harm to others can exceed the bounds of liberty. Jefferson famously said that he didn’t mind another person’s belief or action unless it picks my pocket or breaks my leg. Decades later, pondering the matter in On Liberty, John Stuart Mill put the point more elegantly:

The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinions of others, to do so would be wise or even right. These are good reasons for remonstrating with him, or reasoning with him, or persuading him, or entreating him, but not for compelling him or visiting him with any evil in case he do otherwise.¹⁹

Mill went on to discuss the issue of sufficient harm, reluctant to find instances except concerning rights under formal social contracts or constitutions.

Also pertaining to liberty, a liberal education intends to prepare students for lives of freedom and self-determination. By that standard, students do well to study the skepticism of Socrates, the rhetoric of Cicero, the prophetic voice of Moses, the resolve of Galileo, the civic and scientific engagement of Benjamin Franklin, the vision of Adam Smith, the charity and clarity of John Stuart Mill, the militancy of George Washington, the nonviolence of Mahatma Gandhi, the fortitude of Frederick Douglass, et cetera. Such an education girds one with useful references to parry demagogues, ideology, and dogma. Of course, a person may choose submission in the exercise of liberty.

The Preamble enumerated the nation’s primary objectives:

To form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.

Those goals in mind, the Constitution established a federal government for the United States of America. Later came the Bill of Rights, establishing freedoms of speech and assembly, et cetera. Notice that the goals of liberty and justice enlivened the creation of government in the first place, followed later by a list of rights to be enforced by that government. In reality, rights were not conferred by nature, as many philosophers had suggested. In America, at least, government came first, then rights by way of amendment.

Rights have become the measure of liberty these days, the more the better, though rights may be unsupported by public authorities. One may have a nominal right to vote, for example, but find difficulty getting to the polls or casting a ballot; one may have a right of assembly, but the