07 November 2010

Constitutional issues are balance issues

In building a society, you have to start with a fine sense of the allotments or of the initial endowments, otherwise the market system devolves into an attack on the constitution, where the power questions get adjudicated. Before a realistic market mechanism can function, the society needs to place as sacred, and thus out of reach of the ordinary systems of political debate, the defense of the distributional questions and the questions of property rights. The market mechanism by itself places too much faith on the proper workings of private property to achieve greater social welfare. The market mechanism asks the members of a society to place their faith in the workings of private property for the betterment of that society. To do so, the issues of what counts as private property, and how durable those rules of private property will be, need to be quite strongly defended by the proponents of the market's mechanism. Absent that, what happens is the society embraces the logic of the market and of the effectiveness of private property to achieve the proper economic system, and then when the time comes for the restraints of private property to kick in, those who hold the power say the society needs to alter the rules of private property or of the rules of the balance within the political order. 
Constitutional issues are always balance issues. They are challenges of design. 
Perhaps we could say that 
  • Economics is the science of scale while politics is the science of scope. 
  • Economics deals with quantities while politics deals with qualities. 
  • Economics deals with flows while politics deals with stocks. 
  • Economics deals with engineers while politics deals with designers and architects. 

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