This picture is missing one important piece: provided we get rid of capitalism first — Xtrix
I agree in principle with this statement, but it is an oversimplification I think. It is not capitalism,
per se, that is the corruption point, but rather the elevation of corporate over individual rights, and the over-concentration of capital. In principle, a "restricted free-market" economics could realize the best of both worlds. I'm currently reading John Rawls' analysis of the inherent equilibrating capacities of the free-market (which I assume underlies whatever rational appeal the
laissez-faire argument holds) and he is quite right, I think, in pointing out that it can be a tool of either a private or public ownership society:
It is evident, then, that there is no essential tie between the use of free markets and private ownership of the instruments of production. The idea that competitive prices under normal conditions are just or fair goes back at least to medieval times. While the notion that a market economy is in some sense the best scheme has been most carefully investigated by so-called bourgeois economists, this connection is a historical contingency in that, theoretically at least, a socialist regime can avail itself of the advantages of this system. One of these advantages is efficiency. Under certain conditions competitive prices select the goods to be produced and allocate resources to their production in such a manner that there is no way to improve upon either the choice of productive methods by firms, or the distribution of goods that arises from the purchases of households. There exists no rearrangement of the resulting economic configuration that makes one household better off (in view of its preferences) without making another worse off. No further mutually advantageous trades are possible; nor are there any feasible productive processes that will yield more of some desired commodity without requiring a cutback in another. For if this were not so, the situation of some individuals could be made more advantageous without a loss for anyone else. The theory of general equilibrium explains how, given the appropriate conditions, the information supplied by prices leads economic agents to act in ways that sum up to achieve this outcome. Perfect competition is a perfect procedure with respect to efficiency. Of course, the requisite conditions are highly special ones and they are seldom if ever fully satisfied in the real world. Moreover, market failures and imperfections are often serious, and compensating adjustments must be made by the allocation branch (see §43). Monopolistic restrictions, lack of information, external economies and diseconomies, and the like must be recognized and corrected. And the market fails altogether in the case of public goods. (Rawls,
A Theory of Justice)
The final sentence highlights the critical concept. The notion of seriality in application of the principles of justice says that certain principles of justice must be satisfied first, before others can be applied. In particular, public goods, such as equality of liberty and opportunity. Therefore, when it comes to the general social welfare, economic considerations must be subordinated to social welfare, basic human needs and rights cannot be economized. Once this simple principle is understood and accepted as a 'prime directive,' the legitimate benefits of a free-market system can be reasonably enjoyed.