Everything for Sale
Everything for Sale by Robert Kuttner: A Summary [Insert full name here] [Insert institutional information here] Everything for Sale by Robert Kuttner: A Summary In his book, Robert Kuttner (1999) tries to shake the dominant orthodoxy of laissez-faire economics, which he sees as the “natural form of capitalism,” by attempting to “reclaim a defensible middle ground” between when the market is “best left alone” and when it “needs help” (p.5).Kuttner’s chief premise is that a mixed economy is necessary for a society that is civil and decent, a society where the economy is in optimum health.
For Kuttner, unfettered laissez-faire economy is in conflict with mixed economy, and that their opposition is essentially a struggle between the moderate but rational dissent — the call for a mixed economy — and the prevailing orthodoxy, or the desire to retain the economic status quo.
He further maintains that a mixed economy is realistic precisely because there is virtually no escape from politics, especially in the economic landscape where the government can influence its course by adopting certain national economic policies.
Kuttner readily accepts some notable contributions of the market system. For instance, he concedes that “[m]arkets accomplish much superbly,” and that “[t]hey offer consumers broad choices” (Kuttner, 1999, p. 11). Paraphrasing Adam Smith, Kuttner (1999) states that “the great paradox of the market is that the individual pursuit of self-interest aggregates to an efficient general good” (p. 11). He reaffirms the long-held belief that markets, when left alone, can lead to a vibrant economy.
Yet, Kuttner eventually notes that the free market capitalist system is not entirely a rigid structure that has an aversion to changes. He believes that, “[f]or economies to operate efficiently, drastic change or abrupt disjuncture is the exception rather than the rule” (Kuttner, 1999, p. 12). Thus, markets may accommodate new prices, whether higher or lower than the prevailing prices. Old businesses may go insolvent, and new businesses offering the same goods or services may take their stead.
Through the introduction of changes, the market is able to correct itself. In his book, however, Kuttner proposes something else. Kuttner seeks to dispel the complement notions that government interventions in the market are never successful and that markets are self-correcting and can thus work on their own. To reclaim the so-called middle ground, Kuttner offers detailed examples of how previous government interventions in the market did in fact work. He also writes about the shortcomings of the market for healthcare, the labor market, and the financial markets.
By providing those examples, he then reduces the theoretical clout of contemporary laissez-faire economics, which he then deploys to draw attention to his position in favor of mixed economy. Kuttner further combines these examples with the premise that there are many kinds of economic and social goods that the market simply cannot provide without failing in one significant way or another. For instance, transportation and communication infrastructures are often financed by the government in association with other private and political entities.
Though the funds are not entirely from the government, it cannot be doubted that the government has its share and that it is through its political efforts that the infrastructure projects are realized. Thus, for Kuttner, without the participation of the government in the economy, no matter how limited, the country will hardly be having the social and economic goods it now enjoys today. Clearly, “markets are not perfectly self-correcting” for Kuttner (1999) and, as a necessary consequence, “the only check on their excesses must be extra-market institutions” (p. 62), which is short of saying that the check is the government itself. Kuttner lists several areas upon which excesses have been committed. For instance, he states that even the seemingly innocent frequent-flyer program is guilty of frustrating shopping around for travel services by other airline companies since this program is designed to entice people to “stick with a favored carrier in order to earn mileage credits” (p. 261). To curb this, Kuttner (1999) states that there must be a regulated airline competition where “[r]egulators could set a zone of tolerable prices, to reflect actual costs more nearly” (p. 68). Another example is the case of the electric power market where the subsequent technological innovations in the first three decades of the mass availability of electricity led to the situation where “real prices rose dramatically between 1930 and 1933,” except that the “introduction of public power and federal regulation in the mid-1930s” brought back the “virtuous pattern of declining prices, technical advances, and increasing usage” (Kuttner, 1999, p. 272).
Even the environment is not spared from the failure of a free market. Kuttner observes that the laissez-faire system has encouraged more spewing of pollutants, the manufacture of dangerous products, and others. Through regulatory measures out of broad public-policy goals, Kuttner believes that markets will have no choice but to cut down their waste discharges. The discussion cites other examples in order to illustrate the fact that the free market oftentimes finds help from the federal government.
Kuttner (1999) concludes his book with a restatement of how nations “have now experienced more than two decades of the celebration of markets and denigration of government” (p. 361). Instead of continuing such prevailing notion, he reasserts that “the case for the market is much more of a mixed case than its champions insist,” especially since markets have become increasingly impulsive in breaching what used to be the province of rights.
For Kuttner, the more these markets try to penetrate the province of inalienable rights in their relentless pursuit of profit, the more constraints from the government are needed. Otherwise, the whole foundation upon which the free market capitalist system stands will likewise become endangered. Reference Kuttner, R. (1999). Everything for sale: The virtues and limits of markets. Chicago, IL: University of Chicago Press.