The Economist UK - 16.11.2019

The EconomistNovember 16th 2019 19

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Warren’s classical economics

The Economistis concerned

about Elizabeth Warren’s

“dubious...vilification of busi-

ness” (“A plan for American

capitalism”, October 26th). Yet

the principles that lie behind

the Democratic presidential

candidate’s proposals are

similar to those found in parts

of Adam Smith’s “The Wealth

of Nations”. He too argued that

wide gaps between the classes

are dangerous and thought

that the most scrupulous and

suspicious attention should be

paid to any policy plans com-

ing from businessmen.

In recent decades gains

from productivity increases

have been monopolised by the

wealthy, a contrast to Smith’s

belief that productivity gains

from the division of labour lift

the lowest ranks of people. Ms

Warren advocates a return to

the Glass-Steagall Act; Smith

also called for the careful

regulation of banking.

It is right to be concerned

about excessive government,

but Smith himself said there is

a role for government when

businesspeople neglect ethics.

Today’s market system needs a

significant course correction

towards the direction of equal

justice. Such a correction

would be entirely consistent

with Smith’s simple secret for

prosperity: justice, liberty and

equality.

john hill

Emeritus professor of politics

and history

Curry College

Milton, Massachusetts

You concluded that Ms Warren

underestimates “the dynamic

power of markets to help

middle-class Americans”. But

for years now the American

middle classes have witnessed

their own destruction by un-

leashed market forces.

The “power of markets”

allowed my family’s health-

insurance company to deny

payments for crucial tests and

hospital care during the treat-

ment of a life-threatening

disease (the doctors who

helped us through endless

appeals often do this for long

lists of very sick patients). The

university where I teach has

opened food banks in recent

years. And during the wave of

foreclosures it was not the

invisible hand of the market

but our local congresswoman

who reached out to help

families keep their homes.

sharona muir

Perrysburg, Ohio

As a Republican who lived in

California for 40 years, and

who was a close neighbour of

Ronald Reagan, my politics

have changed since living in

Norway. Capitalism is based on

selfishness. The welfare states

are based on unselfish love. If

equality of opportunity is an

essential element of an effi-

cient, happy and healthy soci-

ety, Elizabeth and Bernie are on

the right track.

bob o’connor

Eiksmarka, Norway

Ms Warren has properly

diagnosed America’s

problems, but she is offering

the wrong prescriptions. Not

only do they have no chance of

passing legislative muster,

they won’t even gain the sup-

port of many Democrats. Her

plans are heavy-handed and

expensive, and do not recog-

nise what many studies of

human behaviour have verified

over the years: incentives work

better than regulation.

john thomas

Fort Collins, Colorado

When East met West

Helmut Kohl’s decision to

swap East German Ostmarks at

the same exchange rate as

Deutschmarks was one cause

of the discontentment sur-

rounding German unification

(“Thirty years after the Wall

fell”, November 2nd). More

important was the West Ger-

man unions imposing their

own collective wage bargain-

ing on less productive East

German workers, thus prevent-

ing their western production

line moving east. This resulted

in the deindustrialisation of

the former East Germany.

Compounding this was the

transfer of the generous West

German welfare system to the

lower cost-of-living East,

making unemployment a long-

term occupation for many. My

own analysis of Germany’s

Mezzogiorno(fiscal transfers

from west-to-east and labour

migration from east-to-west)

showed how ten years after the

collapse of communism the

German state often paid more

in welfare than the average

salary in the East German

labour market. Now, 30 years

on, many of those who were

unemployed will be claiming

state pensions.

will page

London

Southern ticket-splitters

“Democrats in Dixie” (Novem-

ber 2nd) suggested that John

Bel Edwards, the Democratic

governor of Louisiana, is the

only person from his party to

hold that office “in the South”.

No doubt you meant the Deep

South. North Carolina and

Virginia also have Democratic

governors. To your point about

pragmatic local politics, in the

election of 2016 voters in North

Carolina replaced the incum-

bent Republican governor

(who supported the divisive

bathroom bill) with a Demo-

crat, and at the same time

voted for Donald Trump.

richard bethune

Raleigh, North Carolina

Scandalous scoff

I am not surprised that the

food is so unpopular at Larkhill

Garrison (“Marching on its

stomach”, October 26th). I was

the last director of defence

catering before the position

vanished. British soldiers used

to have a small amount of

money, known as the daily

messing rate, deducted from

their pay each month. This

covered as much food and

beverages as they wanted, and

really needed—infantrymen

burn calories at a terrific rate

and eat a huge amount of food.

The meals were nutritionally

balanced. But this old system

was decreed unfair by a bunch

of mps and civil servants

because some troops ate less

than others, and some may

have even missed meals.

So the Ministry of Defence

brought in a system called Pay

as You Dine, or pay as you die

as some soldiers call it. They

now pay cash at each meal for

what they actually consume.

Big eaters, like the infantry,

clearly pay more. It is a bad

deal; many soldiers run out of

money halfway through the

month. I objected to the new

system, but the civil servants

won the day. Far too much

military logistics is now con-

tracted out. One day lives will

be lost on operations as a re-

sult. Remember the Crimea?

brigadier (ret’d) jeff little

Osmington, Dorset

In 2018 I had the misfortune to

stay overnight at an army base.

The catering in the officers’

mess was so bad that I wrote to

the chief of the general staff, to

say that if this was the standard

for officers, what was it like for

soldiers? He replied that he was

extremely satisfied with

present standards and that the

managing-director of a London

hotel was available for advice

when required.

richard collins

Hinton St Mary, Dorset

With humbled breast

“I did nothing in particular,

and I did it very well,” William

Rehnquist said about his

oversight of Bill Clinton’s

impeachment trial (“Trying

times”, October 26th). The then

chief justice of the Supreme

Court quoted those lines from

“Iolanthe”, his favourite opera

by Gilbert and Sullivan. In fact,

the costume worn by the lord-

chancellor character in one

particular production of

“Iolanthe” inspired Rehnquist

to add gold stripes to the

sleeves of his justice’s robe, so

that he would stand out.

david white

Senior lecturer

Department of Classics

Baylor University

Waco, Texas