An enlightened system of financial capitalism requires some government interventions, including a progressive income tax. There also needs to be a social safety net, and it has to be continually improved and reworked. ….
People aren’t inherently and uniformly loving to their neighbors, but our institutions can be changed to reward the better side of human nature.
One of these better sides is the charitable impulse, and the tendency, at least in the right social environment, for wealthy people to give much of their wealth away constructively. Such a tendency ought to be considered central to financial capitalism.
One other singularly important human impulse was emphasized by Adam Smith in his 1759 book, “The Theory of Moral Sentiments.” This is the desire for praise. We see this plainly in the behavior of the youngest children and the oldest and weakest people, those with no hope of attaining power over others.
Robert Shiller, “Logic of Finance Can Banish Corruption“, Bloomberg View, 7 March 2012.
HT The Browser
This is the last of 4 excerpts from Yale economist Robert Shiller’s new book Finance and the Good Society, to be published next month by Princeton University Press.
Tags: Robert Shiller