An operating system is a set of instructions that
orchestrates the moving parts of a larger system. The
most familiar example is a computer operating system that
coordinates the keyboard, screen, processor, and so on.
Operating system instructions are written in code that
can reside in electrons (as in a computer), chemicals (as
in genes), or social norms and laws. Frequently, parts of
the code can be expressed mathematically.
Just as our Constitution sets the rules for our
democracy, so our economic operating system sets the
rules for capitalism. Our economic operating system
isn’t as widely understood as our Constitution, nor
is it spelled out in one concise document. It’s
visible if you look for it, but it’s hidden in a
shroud of statutes and court decisions. Still, like the
Constitution, it’s there — and it runs the
mercantile life of our nation.
I like to think of our economic operating system as
analogous to the rules of the board game
Monopoly. It defines such things as starting
conditions, rules of play, and the distribution of
rewards and risk. It defines them partly through law, and
partly by assigning fictional things called property and
money. ...
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The perennially popular board game Monopoly is a
reasonable simulacrum of capitalism. At the beginning of
the game, players move around a commons and try to
privatize as much as they can. The player who privatizes
the most invariably wins.
But Monopoly has two features currently lacking in
American capitalism: all players start with the same
amount of capital, and all receive $200 each time they
circle the board. Absent these features, the game would
lack fairness and excitement, and few would choose to
play it.
Imagine, for example, a twenty-player version of
Monopoly in which one player starts with half the
property. The player with half the property would win
almost every time, and other players would fold almost
immediately. Yet that, in a nutshell, is U.S. capitalism
today: the top 5 percent of the population owns more
property than the remaining 95 percent.
Now imagine, if you will, a set of rules for
capitalism closer to the actual rules of Monopoly. In
this version, every player receives, not an equal amount
of start-up capital, but enough to choose among several
decent careers. Every player also receives dividends once
a year, and simple, affordable health insurance. This
version of capitalism produces more happiness for more
people than our current version, without ruining the game
in any way. Indeed, by reducing lopsided starting
conditions and relieving employers of health insurance
costs, it makes our economy more competitive and
productive.
If you doubt the preceding proposition, consider the
economic operating systems of professional baseball,
football, and basketball. Each league shifts money from
the richest teams to the poorest, and gives losing teams
first crack at new players. Even George Will, the
conservative columnist, sees the logic in this:
“The aim is not to guarantee teams equal revenues,
but revenues sufficient to give each team periodic
chances of winning if each uses its revenues
intelligently.” Absent such revenue sharing, Will
explains, teams in twenty of the thirty major-league
cities would have no chance of winning, fans would drift
away, and even the wealthy teams would suffer. Too much
inequality, in other words, is bad for everyone. ...
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