The most dynamic economic and political institutions right now are those that have abandoned the goal of redistributing wealth, in favor of increasing wealth for the total society.
I’ll give you three examples. One is the shift from a conscripted army to an all-volunteer force. A draft is based on the notion of equality; everyone serves. To be sure, there are draft dodgers and deferments; but there is also a fundamental assumption that the responsibility for war should be distributed across a very broad base of people. A volunteer army concentrates the “goods” — or in this case, the “bads” — of risk, in a much more narrow sector.
Another is the deregulation trend. When you remove regulations to make industry more dynamic, you’re sacrificing the egalitarian consequences of political rules. When you deregulate women’s reproduction, you decentralize decisions about population. You take those decisions away from the legislatures that had criminalized abortion and, in some cases, contraception.
And a third example is the devolution of the welfare state. When you shift from unemployment compensation to job retraining, it allows individuals to leave one narrow labor market and look for different opportunities.
In all these cases, you have gone from the characteristic moves of an egalitarian distributor of wealth to a state that creates wealth, without an overriding concern with the way wealth is distributed. The total pie gets bigger, but you invariably have people and groups that are left behind. That, of course, is one of the great challenges in the market-state. How do you countervail this dynamic? Different market-states will choose to do this differently.
