The Ethics of Wealth: “Economic Freedom, Wealth and the Alleviation of Poverty” John Taylor (Stanford)

Abstract: The economic future is uncertain for many Americans. Unemployment remains high following the deep financial crisis. Median family incomes have stagnated. Poverty rates are at historical highs. The income distribution remains highly concentrated. And new research shows that intergenerational mobility has declined. Many attribute these developments to problems with the market economy and to insufficient government interventions needed to moderate market outcomes. Some economists argue, for example, that U.S. income and wealth concentration will remain high without major increases in government regulations and top tax rates. In this lecture John B. Taylor puts forth the alternative view that government actions and interventions are themselves a major cause of these problems. Drawing on the history of economic policy during the past 50 years and empirical evidence on the impact of specific policy actions, Taylor shows that cutting back on those government interventions that suppress competition, blunt incentives, and encourage regulatory capture can be expected to increase real income growth, reduce unemployment, and alleviate poverty. The policy implication is that rather than moving away from the principles of economic freedom that have been successful in removing many people from poverty throughout the world, American policy makers should find ways to deploy these principles more widely.

John Taylor is the George P. Shultz Senior Fellow in Economics at the Hoover Institution and the Mary and Robert Raymond Professor of Economics at Stanford. He chairs the Hoover Working Group on Economic Policy and is director of Stanford’s Introductory Economics Center.

Taylor's fields of expertise are monetary policy, fiscal policy, and international economics. His book Getting Off Track was one of the first on the financial crisis; his latest book, First Principles, develops an economic plan to restore America’s prosperity.

Taylor served as senior economist on President Ford's and President Carter’s Council of Economic Advisers, as a member of President George H. W. Bush's Council of Economic Advisers, and as a senior economic adviser to Bob Dole’s presidential campaign, to George W. Bush’s presidential campaign in 2000, and to John McCain’s presidential campaign. He was a member of the Congressional Budget Office's Panel of Economic Advisers from 1995 to 2001. From 2001 to 2005, Taylor served as undersecretary of the Treasury for international affairs where he was responsible for currency markets, international development, for oversight of the International Monetary Fund and the World Bank, and for coordinating policy with the G-7 and G-20.

Taylor was awarded the Alexander Hamilton Award for his overall leadership at the US Treasury, the Treasury Distinguished Service Award for designing and implementing the currency reforms in Iraq, and the Medal of the Republic of Uruguay for his work in resolving the 2002 financial crisis. At Stanford he was awarded the George P. Shultz Distinguished Public Service Award, as well as the Hoagland Prize and the Rhodes Prize for excellence in undergraduate teaching.