NEW YORK: The advantages of the West's economic system defeated communism in Eastern Europe and set back economic nationalism and populism in much of the Third World. Yet, in the West itself, a flaw in the system has become glaring -- and damaging -- to all.
The system no longer offers a fifth or more of its active-age members enough economic opportunity to integrate them into society. In the U.K. and U.S., pay has fallen too low for the self-support and job stability of low-end workers. In Western Europe and Canada, to varying degrees, such low pay is ruled out by law or wage-setting bodies, but these block low-end workers from jobs. The resulting idleness, deprivation, drugs and crime pose costs and hazards to everyone.
With damage so widespread, a broad-based political bargain to correct the flaw is now feasible. To conceive the needed package of reforms, though, we must first understand the West's economic model: how its parts were designed to work and how it can be refitted to regain its capabilities.
The core of that model was invented (mostly by Scots) in the 18th century Enlightenment. It was a system to release people's enterprising spirit and clear the way for broad prosperity.