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Paul Krugmann on Economic Morality and the Ideal Society

My vision of economic morality is more or less Rawlsian: we should try to create the society each of us would want if we didn’t know in advance who we’d be. And I believe that this vision leads, in practice, to something like the kind of society Western democracies have constructed since World War II — societies in which the hard-working, talented and/or lucky can get rich, but in which some of their wealth is taxed away to pay for a social safety net, because you could have been one of those who strikes out.

Such a society doesn’t correspond to any kind of abstract ideal, whether it’s “people should be allowed to keep what they earn” or “from each according to his ability, to each according to his needs”. It’s a very non-Utopian compromise. But it works, and it’s a pretty decent arrangement (more decent in some countries than others.)

That decency is what’s under attack by claims that it’s immoral to deprive society’s winners of any portion of their winnings. It isn’t.

Paul Krugmann

7 thoughts on “Paul Krugmann on Economic Morality and the Ideal Society”

  1. I don’t know how to even reason with people who believe that it is morally acceptable to have some people have billions of dollars – more than small countries – and others to have not enough to have adequate food, water, clothing, and shelter.

    This is regardless of the people without being horrible, lazy, criminal people. Even if that is true, it still does not make it moral to allow them to suffer, especially when the rest of us can survive with a few dollars less.


    1. Astasia, you commie pinko! It’s so good to see you again! 🙂

      Like you, I don’t mind that some people are rich. But (1) I question the value of any social system that creates a huge gap between the rich and poor, and (2)I question any ideology that places the whole blame for poverty on the poor. Any system — any of our modern systems, at least — is going to result in some people being better off than others. We need to recognize that at least some of the problem is caused by the social systems we live under.


  2. I agree with the claim that absolute good morality requires acceptance of some degree of social safety net or welfare, taxes, social security, etc. We must live in social systems and none are perfect. No rich person could live without a social system to protect the desperately poor from simply redistributing the rich person’s wealth by force.

    Distribution of wealth is an often unrecognized rational for social systems existing. The wealthiest could not enjoy being wealthy without a system to protect them from the poorest. The human nature supports “communal-ism” when universal equality is required. Socialism is the first step where there is a tiny group of wealthy and near communal living for everyone else. Democracy is a system that allows wealth to be distributed unequally and allows the majority to create a safety net to protect the destitute as well as protecting the wealthy from the destitute. The wealthy then forget that they are wealthy because their entire wealth is not DEMANDED by the multitude of poor and is allowed to be taxed instead of taken.


  3. Agreed, any wealthy person who assumes that they will never be in need is living in a fools paradise. Remember 10/29/29, millionares one day and selling apples on a street corner the next.


  4. My take on the issues of taxation and the safety net is this, decisions about raising revenue (the how much and how to) should be based upon what is appropriate. This means that methods and standards must always be subject to change and adaptation to meet existing and future needs.

    Ideology provides a useful base, it is a way to organize, refine, and present a perspective. If that ideology becomes, or is from the beginning too inflexible to admit to adaptation, there is a problem.


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