The Search for The Golden Middle Way

I have some favorite exotic words that I savor, lifted from other languages – words with magic in them, words that spark the imagination, words of charm and elegance, words of comfort and hope.  I, for example, like the French word “papillon”; it’s so much more charming than its English translation, “butterfly”, possibly because I don’t find it as common a term as a native French speaker might.  But my favorite word of all time would have to be “sophrosyne.”  It rolls off the tongue with such elegance, mingled with charm; but above all it contains such mysteries that understanding it is a life-long quest.  It is an old Greek word that is essentially untranslatable.  Or rather, its translation is a project that must be accomplished within each person, for it denotes not a thing, but an approach to living.  Plato describes it in his dialogue, Charmides.  It represents a healthy-minded way of life characterized by harmony, moderation and avoidance of unproductive extremes, and was perhaps the primary social goal of ancient Greece. It was first translated for me as “the golden middle way is best.”  The closest approach to a short translation might be to take the two phrases carved on the entrances of the temple of the Oracle of Delphi, “Know Thyself” and “Nothing to Excess”, and to stir them in your head until you get it right.  That’s been my goal all my adult life.

My yearning for sophrosyne was heartened recently by two reviews, one a really fine article on Sunday, September 2, by Stephen Pearlstein in the Washington Post, the other the final chapter in David Rothkopf’s book, Power, Inc.  That the paradigm shift in economics that I mutter about from time to time is well underway is evidenced by both.  They reveal through many sources a general perception by conservatives and liberals alike that American capitalism is severely ill, and requires substantial treatment for its restoration to health. They further reveal that the search is underway for some middle way to accomplish that.  The general recognition that other alternatives such as communism (itself an intellectual extreme of the 19^th century), will not resolve the issues shows a healthy-minded regard for realities that has sometimes been lacking in the past.

Pearlstein, in his review, focuses on a variety of diagnoses of the illness favored by different experts from right and left.  All seem to agree, for starters, that, in Pearlstein’s words, “A pure market economy is an ideological fantasy; even the freest markets operate in a framework of laws, infrastructure, institutions and informal norms of behavior in which government is heavily implicated.” In other words, all sides are beginning to reject the intellectual excesses of pure free market theory. The most extreme conservative, Edward Conard, a funder of Mitt Romney, argues that the illness is insufficient income inequality, while, at the other end of the spectrum, Nobel Laureate Joseph Stiglitz argues that the problem is an inequality gone wild that has led to governance by plutocracy.  Rather like the blind men and the elephant, various experts argue that the problem is too much promotion of business rather than the market itself (Luigi Zingales), or reliance on the performance of financial expectations rather than the product market itself (Roger Martin), or lack of adequate regulatory infrastructure (Jeffrey Sachs.), or lack of accounting for what Stiglitz calls social capital, Zingales calls civic capital, and Martin calls the civil foundation.

Rothkopf focuses not on the diseases of capitalism but on real world variations of capitalism that are being tried in countries around the world.  He makes a persuasive argument that American laissez-faire capitalism, itself a fossil of the 19^th century without the built-in  means to manage stateless supercitizens like multinational corporations, is unable as it stands to deal with the stresses of globalism, but that the real question is which form of capitalism can do better.  In addition to the American lightly regulated laissez-faire form, he posits four major competing models: Chinese state-managed capitalism, German and Scandinavian Eurocapitalism, Indian and Brazilian Democratic Development capitalism, and Singapore’s Entrepreneurial Small-market capitalism. Each country’s model has features tailored to its culture and stage of economic development; what they all have in common is a much larger role for government than that found in the U.S. 

Rothkopf’s vision is of a world in which government and business partner rather than compete.  Their missions can be to a large extent complementary, government to provide the “whole-person” needs of its citizenry, business to provide the goods and services sought by customers. Each has major goals and capacities the other simply cannot have. The 21^st century task is to find a new proper balance, and that will require abandonment of the ideological excess of the past.  The golden middle way is best.