Transcript
REBECCA M. BLANK: But let me start at a place that I think both Bill and I very clearly are – and I want to make that clear, and I suspect he will as well. We both believe that the market is the only viable way to organize a complex economic system that, at least, we have discovered to date in this world. On this fundamental point, both he and I agree. Let me spend a minute telling you the structure of my argument, and, again, I think our disagreement here is one of degree, not of a fundamental importance.
The advantages to the market are many. It provides incentives for productivity. It fosters the efficient use of resources. And many, many aspects of the market require no central direction or authority, which is amazingly useful; they happen "as by an invisible hand," to quote a very famous economist and moral philosopher. But markets are not perfect systems. Classic economics will tell you there are inherent problems with markets, so-called market failures: problems of how to deal with public goods, with externalities, with inadequate information. All of you who have had Economics 101 should have heard those terms.
All of these reasons are reasons why economists think markets should not operate unchecked, and there is a long tradition in economics arguing about how government regulation of markets, properly used when market failure exists, can enhance competition. Now, there's quite a substantial debate among economists and a very wide range of opinion about how frequently one sees market failure, and therefore how frequently one should use government intervention and regulation. But that is a part of classic economics, and I do not step out of my role as an economist to put that set of arguments on the table.
There are, however, I think, at least three additional arguments somewhat outside of economics. The first of these is that markets are themselves embedded in larger social and cultural systems, and they reflect all of the biases and the problems of those systems. If one group has more political power, inevitably it has more economic power, and conversely, those who are marginalized or excluded in society are almost always marginalized and excluded in various ways in the market. Those who would challenge injustice or name inequities in society therefore necessarily challenge the operation of the market and suggest corrections. Many times those corrections are not just tied to the market; they're tied to many other larger social changes as well.
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