Reading this column by Paul Krugman this morning, I realized that I have maybe been missing something. As and economist and historian, I've always been somewhat perplexed by a negative reaction to the idea of government intrusion into economic activities. Some people have a great aversion to progressive income taxes and their redistributive element. Some people label public policy such as the Affordable Care Act as "socialist." As Krugman points out, these reactions to government policy aimed at assisting the less fortunate or providing equal access to essential services are based on the assumption that the free market somehow yields up the morally best outcome. Perhaps if we all started out with exactly the same opportunity when we are born, then outcomes would reflect inherent abilities (with a certain amount of luck thrown in). The fact is we don't all start with the same opportunities and we are not all provided the same access to the education, health care and other things that affect economic success. Throw in discrimination on the basis of race, religion and sex, and the lack of a moral justification for economic outcomes in a free market becomes obvious. The market is not "free." The outcomes experienced by many Americans are affected by more than innate ability and hard work.
In the US, income distribution and economic opportunity are becoming more skewed every year. The transfer of wealth to the top 5-10% over the past decade is a major reason why the current recession has been so prolonged and shows little sign of ending any time soon.
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