More on the Individualist Ethos

Commerce and market transactions are in the private sector, which is part of civil society. Its responsibility is prosperity—not wider social or political issues.

Every ethos cumulates values from previous Stages. So the Individualist ethos, it includes Legitimist & Pluralist values and institutions that provide constraints and responsibilities.
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The Individualist ethos depends heavily on the firm establishment of:

• legal support for entrepreneurial effort and productive work;
• access to social power via property rights;
• protection for individuality (e.g. trademarks) and contracts;
• efficient and effective adjustments to the legal framework to aid innovation;
• formation of new groups with interests related to commerce or its effects (e.g. trade unions, industry-wide umbrella organizations, campaigning bodies).

The social structure undergoes a major alteration in Transition #2.

The transition of Pluralism ► Legitimism empowers groups without necessarily affecting social classes or group structures significantly. Typically, class is perceived in a bipolar way:

«haves» (land-owners and traditional political elites)

v

«have nots» (the masses, labourers, farm and factory workers)

The next transition of Legitimism ► Individualism is associated with a change from that bipolar socio-economic division to a more complex stratification containing a «middle class» and a much greater diversity of occupations.

More on Social Classes

Middle classes tend to be urban dwellers, who drive prosperity in terms of both production and consumption. According to The Economist, the number of middle class people in Asia (defined by having at least a third of their income available for discretionary use) exceeded that in the West by the end of 2008.  

The composition of the classes will vary from one society to the next, but broadly speaking:

• Middle classes include: professionals; lower, middle and senior managers; officials; highly skilled workers.
• Lower classes include: unskilled manual workers; poorly educated rural peasants; the indigent.
• Upper classes include: business magnates; top managers; hereditary aristocrats; celebrities; the most senior government officials; political leaders.

…almost as much as they hate risk.

Competition reveals who are the strong, and removes the very weakest from markets. Many markets end up as duopolies, with two major players and a whole host of smaller fry.

Strong businesses have no compunction to crush weaker firms or devastate new entrants to the market if it is in their interest to do so.

As a result, each business must find and fill a particular niche where it has an advantage and can hold sway. Niche monopoly is how economic diversity and innovation develop.

Because it is about the common good, government has a duty to actively ensure that fair competition, beyond niches, actually occurs. While every businessman agrees to such competition in principle, each is opposed to it in their special case.

Businesses like to have subsidies, monopolies, tariff protections and such like, so any pro-business government finds itself in conflict with, or more usually in the pocket of, large businesses seeking to offload risk and become more profitable. The majority of businesses are small and little influence.

Governments need agencies dedicated to prohibiting monopolies or monopsonies, and stopping easy and obvious potentials for market abuse like Ponzi investment schemes, misleading labels, fraudulent weighing machines &c. This is easier said than done.

No market is ever «free» or unfettered. A market should permit «free enterprise», which means allowing buyers and sellers to freely use the market. Sellers and buyers have to commit themselves in any transaction, and so there must be regulations that protect the market's integrity and ensure fairness on crucial matters for all participants.

The individualist ethos requires Government to be responsible for:

• protecting the use of markets as essential common goods;
• getting out of the way of people and businesses using these markets;
• avoiding policies and incentives that create competitive distortions within markets.

Every politician realizes that commerce is the source of wealth in society—and therefore the source of wealth for the political classes.

At this Stage of political maturity, being pro-business usually means causing considerable harm or disadvantage to consumers and taxpayers.

This commonly occurs through rigging markets, directly or indirectly, in numerous ways, including:

• protecting industries in their constituency;
• subsidizing specific firms to gain votes;
• diverting spending (i.e. pork) to their constituency;
• returning favours to campaign contributors;
• taking money (i.e. bribes) to assign contracts;
• receiving incentives to shape legislation on markets;
• pressuring regulators to distort market regulation.