On its 50th anniversary, the World Bank stands as both symbol
and instrument of capitalism triumphant - over communism, indeed
over all forms of command economies.
The free market principles the bank relentlessly pressed -
sometimes simply forced - on the poor nations in the name of
financial virtue appear to have been vindicated.
The economic aspect of the Cold War was won as decisively as
the political or the military.
But there is another war capitalism must fight that will
challenge its supremacy as vigorously as communism ever did - and
which it may lose.
The conflict is between the efficiency and growth that free
markets deliver, and the lack of equity they promise in a world
increasingly concerned with fairness.
Any system based on competition is, of course, premised on
producing winners and losers. By definition, competitive markets
are not concerned with the problems of the losers. Politics, at
least when free markets first developed, ignored their problems as
But as industrialism created great gaps between the few and the
many, society edged toward establishing a floor below which the
losers wouldn't be permitted to fall.
Lose they might, but they wouldn't be allowed to starve. This
was the basis of the modern welfare state.
Ardent free market advocates claim it degrades economic growth,
but events have proven that markets can live with a considerable
social tax for those less well-off and still thrive.
In fact, it has been prudent for capitalism's supporters to
accept some measure of the welfare state. Otherwise, losers might
have attacked capitalism's very principle of winner-take-all.
But that is now an old threat, more serious in the depression
and before than since. Too many are doing too well today to want to
The new threat is different. It arises from those who would
level upward, not downward.
The claimants aren't those at the bottom, but anyone who gets
less than precisely whatever anyone else gets - except for earned
This isn't as easy to dismiss as the idea that there should be
no rewards for ability and achievement. That would threaten the
efforts of too many to be taken very seriously.
But society's penchant for equity conflicts with what markets
achieve, and won't be easy for advocates of a competitive economy
to get around.
For instance, whatever happens with health care, society has
decided it is not only some kind of human right, but that everyone
should receive the same level of benefits. …