In the early days of economic science, in the 18th and 19th centuries, a lot of work went in to analysing and attacking vested interests, monopolistic arrangements that enabled the rich to live lives of idleness while enjoying the unearned rents from their estates, mines and factories. This intellectual and political work was known as “radicalism”, as it sought to take an axe to the root of society’s economic and social ills.
In Radical Markets Eric Posner and Glen Wely self-consciously raise again the standard of “radicalism”, both in the sense of going to the root of society’s ills and proposing solutions that are transformative. They argue that the global economic system is, once again, dominated by monopolistic practices and vested economic and political interests. The system is rigged. Inspired by the approach of their 18th and 19th century forebears, they suggest a range of reforms that will de-rigg the system, thereby transforming the global economy, dramatically improving productivity, increasing economic equality globally and making democratic systems more responsive to voters’ preferences.
The book’s five chapters cover: ideas for completely reforming how we think about property, by requiring it to be taxed (and transferred) at a self-assessed value; reforming voting systems by allowing voters to increase their influence on issues they care most about and allowing the expression of negative as well as positive opinions; improving global labour markets by dramatically increasing immigration (and, effectively paying poorer people in developed countries to sponsor immigrants from less developed countries); improving corporate governance through limitations on the cross-ownership of different companies within the same industry by asset management companies; and making the Googles and Facebooks of the world pay their users for data.
Posner and Wely are clear that their book does not constitute an “oven-ready” policy programme, for immediate implementation. They acknowledge that policies they advocate will have to be tested and would require appropriate regulatory and supervisory regimes. Nevertheless, they deliberately follow the logic of their position to its logical conclusions, rather than what might be politically feasible right now. That helps to highlight the “radical” potential of what they are advocating and also throws into sharp relief the shortcomings of current practice. Their arguments about how current arrangements are delivering unnecessary poverty, inequality and waste are persuasive.
In fact, on the whole, the solutions offered do not seem wildly impractical and in some important areas, such as opinion polling they are already getting traction. In others, such as the management of some commercial assets, or elections by political parties of candidates for office, it is easy to imagine how immediate improvements could be made by adopting the methodologies outlined here.
In some areas Posner and Wely are going to be faced with a very hard sell. Currently Facebook auctions advertising space on a continual basis. Posner and Wely want to extend this kind of auction to all property. This would give rise to a situation where everyone’s house is, essentially, permanently on the market. It makes a lot of sense and has many attractive features—“wouldn’t it be better if people invested less of their emotional energy in objects and more in their personal relationships”—but it would require some very deft political messaging (and some brave politicians) to get it off the ground. Similarly, it is hard to see one person one vote ever being abandoned for elections to democratic legislative assemblies, whatever its technical limitations. These may not be ideas whose time has come, but they feel like ideas whose time, in some shape or form, is coming. This is a very thought provoking book. Expect to hear more of common ownership self-assessed taxes (COSTs), quadratic voting, Visas between individuals programmes (VIPs) and data as labour.
Benedict King, Contributing Editor
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