I am a very reluctant socialist. My entrepreneurial streak is as persistent as it is impractical. Poor J, the fashion designer, listened as I tried to get her interested in my idea for a line of outdoor bras and matching skirts, then gently explained the economics of product launch in the fashion industry. And I actually spent good money having a logo designed for an up market shopper that would serve advertisers to the elite communities on both the east and west sides of Central Park. And I remember painfully the opportunity cost of trying to start a publishers representative firm with a stable of shoestring publications that paid me neither retainer nor my commissions.
Still, there may be goods and services way too important to risk to the vagaries of the free market. First off, let's try carving out food, basic shelter, and healthcare. What the heck is basic shelter? A FEMA trailer? And isn't the health of our environment also too valuable to sacrifice at the alter of mining, strip malls, and McMansions? Yep, it's a murky business. We'll need to have meetings, arguments, votes.
Before we call in the ethics specialists as in medicine, let's look at the "first do no harm" segments of the economy where Wall Streeters can do no damage. Where can we let these risk-loving, hypercompetitive, high-stakes boys and girls play safely without doing damage to themselves and others? In my one, unsuccessful, sortie into speculative fiction, I envisioned a distant Wall Street commune, where financiers too damaged for honest work might live out their days trading perfume futures. Are flowers even traded as a commodity? In a cheapskate approach to research, I find that that the U.S. fragrance and flavor market for 2009 is projected to be $4.6 million. Keep in mind that includes all the stuff food processors put into cheese to make it taste cheesier or, more likely, into snack foods to make them taste cheesy without including any cheese at all. If we dump in cosmetics and their retail outlets and exclude flavors, the number is $7 billion.
Maybe the traders actually could get themselves and the salespeople on the ground floor of Bloomingdales into a bit of trouble.
A leftish bookseller I am friendly with reminds me that tulip mania, which is acknowledged as the first recorded speculative bubble wiped out fortunes. Like the cultivation of roses, gardenias, and other odiferous flowers, tulip propagation and collecting are hardly essential economic activities. But no sector of the economy, he argues, can really safely contain speculative fever. However, Wikipedia informs me that this 17th century phenomenon has been recently reevaluated by some contemporary historians who view this bubble as almost as innocent as an office sports pool. This cheers me, because I wouldn't want to issue unemployed investment bankers Mao jackets and one-way tickets to a reeducation camp. Maybe, some economics revisionist will come forward with reassurances that we don't need such an expensive fix after all.
At the very least, a silver lining in the financial sector turmoil may be that policymakers will no longer have to restrict economic policy initiatives addressing this and other problems to ones incorporating market-based solutions. If we can have a bailout, maybe we can have a carbon tax to clamp down on emissions right away. Maybe we can really debate whether carbon trading is just one more market, like derivatives, that we don't need, or really a way to solve the climate crisis. Maybe we can mandate solar instead of mounting demonstrations to stop coal-powered plants. To blend metaphor, Henry Paulson has launched a celebrity scent that may have put us as a society on the trail of a truly just, mixed economy. At least, let's talk about it.