Abstract of

The Moral Economy

published by University of Michigan Press in 1998

Adam Smith's classic liberal economy works well only when economic and political power is well distributed. The distribution of power in the twenty-first century depends on which of three paths we take: interventionism, libertarianism, or the middle path proposed in this book.

This path is called "the moral economy." It seeks balance of power among social groupings, in which socially desirable behavior is imposed sidewise-by group acting upon group-rather than downward, through government regulation. Environmental and other social goals are sought by nongovernment agencies as much removed from politics as possible, while social assistance is administered by private agencies financed in part by cash or voucher grants supplied by government, or by a negative income tax.

After two introductory chapters, Part One describes seven current, major problems, showing how, if new institutions (ways of behavior) are formed, these problems can be resolved with discipline from the market and minimal government intervention. They are: poverty, population, environment, ethnic bias, welfare, social security; and health care.

The new institutions are discussed in Part Two: accountability for the management and use of resources, trust, property, money and inflation, law, containment of corruption, taxes, education, religion, morality, and values. These institutions are shaped by the interaction of social groupings with relative balance of power, rather than by government mandate. The final chapter describes the moral economy, using the solutions to the problems cited in Part One and the institutions proposed in Part Two. It also outlines the path by which the moral economy might be approached.