Guest Speaker Argues For a “Moral” Economy
To what do societies owe their advances in social liberalization? To Harvard economist Benjamin M. Friedman, the answer lies in “rising material standards of living broadly distributed.”
Friedman delivered a lecture Monday titled “The Moral Consequences of Economic Growth,” based on his recent book of the same title. In his book, Friedman outlines his hypothesis that a country “is more able and more likely to experience moral positives” when its economy is expanding steadily and its citizens feel that they are benefiting from that growth. At that point, said Friedman, “[a country] is more able and more likely to experience moral positives.
“When a population has the sense that its material wealth is stagnating,” Friedman said, the consequences can include “rigidification, retreat, retrenchment.”
“The question with which I begin is why is it that we care, or, to put a more normative cast on it, why should we care if our economy does well?” Friedman said after a brief introduction by President Nancy Dye. He elaborated that up to a point, economic health has obvious benefits, such as lower infant mortality, better general health and nutrition and better education.
“With higher per-capita incomes,” Friedman said, “people live longer, suffer from fewer diseases, more can read.”
But these considerations end when a country reaches a certain level of prosperity. “The answer to why we care has to be something different from...these connections to basic human dimensions,” he said.
“People are deriving a sense of satisfaction from the notion that their living standard is one that represents forward progress,” Friedman continued, defining the first two basic strategies people have for assessing their own satisfaction with their living standard. “The second is that people want to know if they are living better or worse than people up and down the block.”
In essence, we measure our standard of living against people in the past and our peers.
“The assumption I make is these two sources are substitutes for one another,” said Friedman.
The problem with these strategies is, of course, that not everyone can be better off than they were in the past or better off than their neighbors.
According to Friedman, China exemplifies his theory. “On average over the past 25 years, the Chinese standard of living has increased one percent per annum,” he said. “You do not need to be a China specialist to see the visible impact of this growth. China now has genuinely contested elections at the village level.”
Friedman said that while this advance may seem small, he is confident that China’s democratization will continue.
“We will see China liberalize and democratize at the national level,” he said.
Friedman sees public policy as a viable means of spurring economic growth, and differs from many economists in that he doesn’t agree that “the right role of public policy is simply to stand back and let the market do what it’s going to do. That line of thought is wrong because the rate of growth optimal for any society is faster than the market would provide.”
The audience, a mix of town residents, Oberlin students and faculty, filled nearly every seat of West Lecture Hall. When Friedman opened the floor to audience questions, it came as no surprise to those familiar with Oberlin’s concern with environmental issues that the questions mostly had an ecological focus.
Students wanted to know the implications of Friedman’s hypothesis of growth-fueled moral advance for the future of the planet. Friedman seemed confident that technology will continue to develop at a rate that will allow the United States to adapt to many environmental changes.
“By the time you consider a timescale that is long enough to run out of
something,” he said, “there’s plenty of time to come up with a