But Hayek warned that these benefits come at a terrible price: the market cannot be expected to provide any form of social justice. He believed in his bones that any attempt to manage or tweak the market with such goals in mind not only would fail, but also would undermine the market’s ability to do what it does best. His doctrine thus amounted to, “The market giveth, the market taketh away: blessed be the name of the market.” Anything else would put us on “the road to serfdom.”
Finally, the Hungarian economic anthropologist Karl Polanyi saw that Hayek’s vision of a market-bestowed utopia was unsustainable by dint of being inhuman. People want a say in how their society’s resources are used. They will demand that their – and others’ – incomes reach some minimum dignified level, and they will expect a certain degree of stability. People tend to resist the idea that their pattern of life can be singlehandedly destroyed by some rootless profit-maximizing cosmopolite half a world away. For better or worse, that is how people are. If property rights really are the only rights that matter, politics and society eventually will unravel.
All four thinkers enable us to understand why we have been unable to use our technological prowess to construct an equitable and happy world. But diagnosis is of course only half the battle (and probably less). The task of future generations is to figure out how to become as good at slicing and tasting the economic pie as previous generations were at making it bigger.
J. Bradford DeLong is professor of economics at the University of California, Berkeley and a research associate at the National Bureau of Economic Research. He was deputy assistant U.S. Treasury secretary during the Clinton administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.