Socialism and conflicts of interest

There was a time in my life when I might have embraced the cause of socialism, but that was many years ago and today I proudly march under the banner of centrism. And the current  flirtation with socialism in the US has me worried – at least a little bit.

My concern is not that the US will become a fully socialist country (already having been a partly socialist one for many years, mostly in a benign way). If that didn’t happen in the 1890’s and 1930’s it seems unlikely to happen now.

Rather, my worry is that the prospect of socialism could lead to a powerful counter push to the right.

What – if any – is the relevance of COIs to this prospect?

As I have argued in this blog on occasion, a strong and healthy approach to COIs can be immensely beneficial to many aspects of our society. Conversely, a world without such an approach could be one of “needlessly diminished lives, resources and opportunities.”   In such a society, the case for socialism can indeed be seen as compelling. If private parties don’t live up to their ethical duties then government will fill the vacuum.

A strong and healthy approach to COIs means, of course, enforcement of COI-related laws, rules and norms.  See, e.g., this recent piece  on underenforcement of the fiduciary duty of loyalty.

But more important than enforcement is having a broad view of COIs – one that takes into account the phenomenon of “moral hazard.” As noted in an earlier post, both in the areas of climate change and public debt the wellbeing of the young is being sacrificed to conflicting interests of others – with likely calamitous effects. And of course there are many other areas where intergenerational COIs pose grave  threats to our society.

Addressing this sort of COI will be a considerable task. But the alternative may be a political, economic and social order based on an extremist ideology.

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