Creating an economy of inclusion

Christian religious leaders frequently complain about injustices and inequalities that they argue are caused by markets. Sometimes, supporters of a market economy respond by conceding ground. On other occasions, though, supporters of a market economy respond by arguing that we have not got a real market economy and that we need less state intervention and not more. This kind of response often seems inadequate and rather like the responses of die-hard communists after the fall of the Berlin Wall who argued that real communism had not been tried and that they just wanted another go. Such arguments are difficult to settle. We have theoretical and some empirical evidence, but often the evidence is context specific and hard to interpret unequivocally. A lack of counterfactuals is always a problem in making economic evaluations. However, there are many economic problems – especially those that cause dire poverty - that are demonstrably not the result of markets but of their absence. It is not that markets have been found wanting, it is that injustices have prevented access to markets. Those injustices might be in the form of deliberate policies that lead to the exclusion of people from markets or they might be situations where governments are not undertaking their proper functions of maintaining the rule of law, operating efficient and uncorrupt court systems and properly ensuring that property rights are legally recognised and enforced. In such cases, surely it is not appropriate to criticise markets but, rather, the political forces that perpetuate the exclusion of people from markets. This chapter looks briefly at such situations whilst also examining problems in the West where people are excluded from a market economy such as by employment regulation or land-use planning regulation