Boston Review — Eliot Spitzer: The Rules

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MARCH/APRIL 2010

The Rules

Government’s proper role in the market Eliot Spitzer

This article is part of The Rules, a forum on government’s proper role in the market.

Every day we read the headlines, feel the tensions, observe the consequences of the recent failures of market and government. Having a serious conversation about how to remedy these failures lies at the heart of current American politics. And that conversation should address three distinct questions:

• What are the parameters of government intervention in the marketplace? What rules should we use in deciding when the government should act, and when it should let the market take its course?

• Has our response to the immediate crisis been successful?

• How might we restore an effective structure for corporate governance? The failures of corporate governance account for much of our economic troubles over the past 30 years. Getting out of the current mess will require addressing these underlying failures.

Ideas about government intervention have changed quickly. Ayn Rand was an articulate, powerful voice for libertarianism, the notion that each of us individually deserves to own what he or she creates, and that the role of government must be minimized. For 30 years a libertarian ideology dominated leadership circles, beginning politically with President Reagan, who led a fundamental transformation in our political discourse—about the government’s role in everything from marginal tax rates to regulation. Many people think that Reagan was brilliant, and that his policies were necessary. Whether or not you agree with that assessment, you have to acknowledge that the Reagan agenda dominated our discourse until the fall of 2008, when the entire economic world appeared to collapse.

This article has become a book!

Government’s Place In the Market

Eliot Spitzer
MIT Press / Cloth / $14.95 / April 2010

With all the technocratic talk about credit default swaps and bailouts, Americans still have not come to terms with what we really need: a market that delivers public benefit. Spitzer lays out a map of when and how government should intervene to ensure that the market works for everyone.

With responses from Dean Baker and Robert Johnson.

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Comments

1 |

let's go, people

Let's all sack up and get this guy back into elected office

— posted 03/03/2010 at 02:31 by Nick

2 |

Finally, some sense!

Great writing, this one is a keeper. I'm all for the government as a referee in the market game, but not the great equalizer who picks winners and losers by re-distributing wealth. Eliot's got my support.

— posted 03/03/2010 at 14:54 by Nate

3 |

Core values change over time

I think it's worth noting that whatever we call "core values" is determined in a given point in time. "Market independence" is, to many, also a core value. These are not for all time and all people. So let's be clear that what Spitzer calls "core values" really reflects what HE (and, of course, many others) values, not some transhistorical set of moral imperatives. He's worried about populism, but his values are the values of a populist moment.

— posted 03/03/2010 at 20:28 by Jamie

4 |

Give the employees a say

Good article. But there is one glaring piece of myopia: why leave it to the Board and shareholders to enforce good governance? Give more power to employees. These are people who have a much stronger important stake in the company than the shareholders (who, as you say, can easily sell up and go elsewhere); plus they have a much clearer view on what is really going on - particularly the effectiveness of the CEO. This isn't pie in the sky; many very successful companies are moving towards greater employee participation. Read Richard Semler for an excellent introduction as to how (and why) it works.

— posted 03/04/2010 at 06:03 by Caroline

5 |

Give This Guy A Voice

He's out and running in BR. Thanks for giving voice to Mr. Spitzer. His economic values are sound and he knows what it looks like from the inside. He's still got more to say than those that followed.

— posted 03/04/2010 at 13:36 by Deidre

6 |

In other words, a couple thousand words to say one thing: "what we need is a principled policy against any and all principled policies. Without such 'principled pragmatism' parasites like myself - Eliot Spitzer - would not be able to make very lucrative careers out of making the arbitrary seem scientific."

— posted 03/07/2010 at 01:50 by Grant

7 |

An idea, give the employees instead of the employer the right to chose in which mutual fund to invest the 401(k). That's how it works in Sweden for a part of the pension. All Swedish employees are given a very long list of mutual funds and can choose to invest in one fund or several funds, and change fund at any time.

— posted 03/15/2010 at 12:52 by Martin


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