Markets And The Common Good

Thomas Palley

June 08, 2006

Thomas Palley runs the Economics for Democratic and Open Societies Project. He is the author of Plenty of Nothing: The Downsizing of the American Dream and the Case for Structural Keynesianism. His weekly economic policy blog is at www.thomaspalley.com

Like a modern-day Rip Van Winkle, there are indications that the Democratic Party may finally be awakening from its long slumber and realizing it lacks a compelling identity. That lack of identity is especially clear regarding the economy, and it contrasts with Republicans who have long emphasized free markets. The current moment of Republican unraveling offers Democrats an historic opportunity to close this identity gap and change the direction of American politics.

The Republican free market message resonates with deep-seated cultural attachments to individualism and freedom, and their message tacitly treats free markets as identical to free society. Democrats should challenge this message with one about “markets and society,” meaning that markets should serve both individuals and society. Whereas free markets are especially good at promoting the interests of individuals, there are important societal interests—such as democracy and community—that they fail to address and may actively harm. That calls for institutions other than markets to represent those interests, and also for thoughtfully balancing markets with society’s other interests.