Economic policy affects our business and private life daily. But most people avoid thinking about it. Many bigger picture economic theories can seem impractical, extreme, or so complicated that people sometimes retreat to overly simple reasoning. John Tomasi’s work proposes an alternative approach. It is good food for thought about our personal and business decision making. **
Tomasi, a political philosophy professor at Brown University, has written a book titled Free Market Fairness. In a recent talk at Stanford he described its value added. He started by noting that political philosophy has had three dominant ways to think about people, how they make decisions and what policies that leads them to support.
Tomasi argues that this is incomplete and that it leads to the current situation in which people can’t find any common ground: Too often policy issues are framed as part of a war that pits protecting the economic liberty of the individual against pursuing social justice.
So Tomasi adds an additional option to the table above.
As he puts it, this is “a hybrid theory of liberal justice, one committed to both limited government and the material betterment of the poor.”
I like this because it seems to do a better job of capturing the common sense of living in a democracy with a capitalist economic system. Even Irving Krystol wrote in Two Cheers for Capitalism that capitalism can give us the most efficient economic system, but it cannot be relied upon to give us the society we want. That, we have to make happen.
Tomasi doesn’t claim that his theory can be used to decide each particular issue. The idea is that embracing the connection between economic freedom and a level of social justice, and then recognizing how fundamentally important that balance is to a democratic citizenry, can help us:
- Have more productive discussions, and
- Generate new ideas to achieve the balance we want over time.
It seems like a good framework to use to reduce the gap between public opinion and the actions of our elected officials too.
A Current Corollary at the Company by Company Level
Each business also needs to understand this balance of values as held by its stakeholders. For example, the business response to the Bangladesh building collapse is showing that although they may not always act like it, customers and employees expect companies to strike a balance between price and social responsibility.
‘Georgetown University Business Professor Edward Soule said the tragedy that ensued has almost certainly sent a shockwave into the executive suites of clothing retailers – both out of concern for the lives of those who were sewing their garments, but also out of concern for the reputations of any company that allowed the conditions to persist.
“They know for many of them, their brand integrity is at stake,” said Soule, an expert on managerial ethics and corporate social responsibility.’
**Note: Everything above related to Dr Tomasi’s work is my interpretation based on his presentation. Please refer to his works for his actual articulation and ideas.