The Free Market
The most damaging con
in the history of man
First, some inspirational thoughts to get this discussion going…
“We who live in free market societies believe that growth, prosperity, and ultimately human fulfillment are created from the bottom up, not the government down…
…. No, what unites them all is their willingness to believe in the magic of the marketplace” – Ronald Reagan (conservative president of the United States)
Who wouldn’t want growth, prosperity, and wow, human fulfillment!?
And all we have to do is have a “willingness” to “believe” in “magic”?
Holy shit, I’m totally in!
“The great virtue of a free market system is that it… is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.” –Milton Friedman (proponent of the free market)
It’s as if the free market can fix anything! It’s almost like the “Easy” button – that was easy!
The Free Market Theory
the idea that “we should all act in our own self interests” was quite appealing to wealthy Americans…
Okay, back to reality… The free market ideology has been around, in one form or another, for centuries. In America it started with Adam Smith and his book “The Wealth of Nations” in 1776. It continued to linger in the writings and musings of social and economic theorists around the world, but never really getting much attention. It finally got a big push forward around 1947 when some of these theorists (including Friedman), along with the financial backing of a handful of wealthy American businessmen, got together atop Mont Pelerin in Switzerland to work out their free market vision of our future. Here are some basic free market concepts that were discussed and refined by the Mont Pelerin Society, an organization that still exists today.
- The foundation of the free market ideology is the idea of “the liberty of man” (okay, so far so good).
- Building on this is the belief that we should always act only in our own self interests. If everyone did this then the “invisible hand” (Adam Smith) of the Free Market will somehow create some sort of balance or equilibrium in our economy. (the idea that “we should all act in our own self interests” was quite appealing to wealthy Americans and prompted their financial support of the MPS)
- In a Free Market economy we all decide what to produce and what to consume based on informed decisions. Inferior products and services are not consumed and will either be improved or disappear. This fosters innovation and competition, both of which will create better products and better prices.
- Ideally, only individuals own property, resources, production capacity and only they decide how to best use them.
- Importantly, these personal freedoms are to be self-regulating interactions within a self-regulating market which requires that government oversight and regulations are as close to zero as possible (this another reason why the wealthy Americans supported the MPS!)
- The free market does not insist that all of the above are required in full, but the closer we get to them, the closer we get to some optimally efficient and fair society.
It should be mentioned Adam Smith’s “invisible hand” and other thoughts were way overplayed by those promoting the free market. Smith was actually in favor of regulation, etc. Likewise, even though the Mt. Perlin folks were hardly saints, some of their work was hijacked by wealthy Libertarians from America who tailored them (and the MPS itself) to better suit their needs – corporate America has always been good at that…
The Free Market Reality
It is the exploitation of the free market that has turned an ideological pipedream into one of the biggest and most dangerous cons in the history of man.
As any other ideology, the free market is not so much based on facts, data, or even observation as it is based on theoretical thoughts of an ideal society (ideal in the minds of some). This made it very appealing to Libertarians. The cool thing about the free market being more of an ideology means that it doesn’t really need to be proven out or go through any rigorous validation. As an ideology though, it can be aggrandized, glorified, and exploited – making it even more appealing to Libertarians. It is the exploitation of the free market that has turned an ideological pipedream into one of the biggest and most dangerous cons in the history of man. Sadly, the well-funded free market con artists have lured American Democracy down a very unnatural path. Below are some examples that show that the free market is a load of crap just like those who espouse it – there, I said it.
Lobbyists – The idea of a free market is that you succeed based on the quality of product that you offer and that you get ahead by your merits. The free market says nothing about getting ahead by paying off government officials to ensure your product is protected or to change regulations regarding the safety of your product or its production. The fact that lobbying has become its own industry shows just how far off we are from a free market. The folks that push the free market ideology are the same people that push for more money in politics – that alone shows that the free market is a con.
Our own best interests – the acceptance of “every man for himself” is great in theory but it generates cheating and corruption. Innovation falters as folks take shortcuts to get ahead. Producers take shortcuts in the safety of their products or the manufacturing of their products. They trick us into buying their inferior or dangerous products and services – but that is ok because they are acting in their own self interests. The wealthiest use their checkbooks to control our government and weaken its protection of us. The free market theory, formulated in a vacuum devoid of reality, does not consider greed, but in practice that is what it is all about
Informed decisions – A free market only works when people can make informed decisions that are in their own best interest – choosing the products and services that are best for them. When a company hides misleading information (everything from additives in our food to what pollution they are producing to predatory lending) then we can’t make those decisions. Our government does its best to check for things like contaminated food, dangerous toys, or harmful medicines all across the country – but it is hard to keep up with all the cloak and dagger activities of corporate America. Just think if that “minimal government” was NOT checking things at all – it would take years for consumers to notice any sort of trend that would indicate that they are being poisoned by a product – if they notice at all. Regulation and oversight is required so that we have the information that we need to make decisions and to protect ourselves, but free market folks want to minimize these protections – of course.
Small government – Corporate America turns the minimized government concept into maximized deregulation. They are continually working to eliminate laws and regulations related to pollution, food safety, consumer protection, and worker safety. Other areas include deregulating how much money they can give to politicians and policies, loosening controls on hiding money and on shady financial scams (think the 2008 banking crisis), and moving jobs overseas. Notice that none of that does any favors for us at all – in fact we have and will continue to pay dearly for their side of “small government”. I wonder if this is what Friedman was talking about when he claimed his free market would allow us to “help one another”.
Well… not that small – Corporate America is always running back to the government for help, looking for yet another tax break, more subsidies, free innovation, protection from competition, or help expanding into foreign markets. Other than tax breaks and some subsidies, this reliance on our government is fine and often necessary for our economy to advance. But for the free market folks who despise our government and continually defund it, this is pretty hypocritical. Corporate America views our government as a tool for them to maximize wealth – nothing else.
The other side of small – It is important to realize that the free market types who rely on the government (for much more than what is mentioned above) are the first to flip out over the government doing anything to prop up the average American. The list is long: minimum wage increases, healthcare, investments in education and infrastructure, etc. When free market proponents hear these, they are quick to throw out the “rugged individualism”, “pull yourselves up by your bootstraps”, or “welfare state” rhetoric. The predator elite are driven to chip away at our government, but only where it works for us. They justify their actions by claiming that a big and encroaching government is wasting your tax dollars and taking your freedom. They execute it by lobbying for lopsided tax breaks that force our government to cut back, but you’ll never see those tax breaks impact government programs that favor the wealthy. Their government programs are saved, ours are minimized. They get the tax break and you lose the services. They grow stronger and we grow weaker – aaah “the magic of the market”.
The cost of “free” – In addition to countless tax breaks and subsidies, corporate America also “externalizes” the cost of the damage that they cause (cigarettes, pollutants, additives, climate change, etc.). That typically means that taxpayers pay for things like increased healthcare costs, oil spill clean-ups, superfund sites, etc. In terms of the free market, externalizing costs hides the lack of merit of a product or service as well as the actual cost – we might pay a little less up front but we all pay more later. The free market thugs want to keep the government out of their way until there is a mess to clean up. Climate change is going to cost us dearly, if it isn’t already too late. It will be our ultimate sacrifice for the free market.
The bullshit of “balance” – Influence over government creates policies that tilt the playing field and removes the idea of getting ahead based on your merit. Tax codes that favor wealth over labor slowly but consistently put more money in the hands of the wealthy. Inconsistent application of laws and penalties unfairly punish certain people while letting others walk (remember who got punished for the 2008 financial crisis? I can’t). when the wealthy control government they control the rules – the economy will continue to be tilted in their favor.
The Free Market Damage
Since it is impossible to prove that they work or not, perhaps the only measure of an ideology’s success is the number of people who have accepted the rhetoric. In the case of the free market, the rhetoric has been very appealing in two ways. The first is its hypnotic appeal to us common folks. Who wouldn’t want an economy and society that relies strictly on “freedom”, “liberty”, “individualism”, “nature”, etc? The second is its “invisible hand” which works for corporations and the wealthy. They can get away with a lot in a free market economy that is “natural and inevitable, existing outside and beyond government. So whatever inequality or insecurity it generates is beyond our control” – isn’t that convenient.
To get us to buy-in on all this, free market proponents portray our government as encroaching, overreaching, and taking our freedoms away (look closely at President Reagan’s quote above). These are the battle-cry of the Libertarians. They have been very successful at this and many of us have be convinced that we should tear our government down, but without knowing why. Corporate America and the predator elite are using the free market ideology to lead us down their path – a path that will take us to an economy, and even a society, controlled by the wealthy.
In the corporatized implementation of the free market, liberty is only for the wealthy. They use their power and reach into government to tilt the playing more and more to their advantage. They get ahead, not based on their merits, but on their “fixing the system”, allowing themselves to more efficiently act in their own interests compared to everyone else. Ultimately this creates enough economic disparity to destroy a society.
One example of the far reaching impact of the free market is in manufacturing. In order to increase profits, many manufacturers have moved their production overseas (to China, for example). So while it *might* reduce our costs at the check-out line, it definitely kills jobs here at home. Fewer regulations overseas calls into question the safety of the products, increases pollution for everyone, and contributes to climate change. Densely populated manufacturing areas are created which lead to poor working/living conditions, underpaid workers living in squalor, and increases the chance of pandemics. Back home, the products are typically of lower quality, sometimes dangerous, and often needing replacement – forcing the above cycle to continue. Free market proponents sometimes use the excuse of needing to be competitive, but the only reason there is this competition in the first place is because manufacturers were allowed and incentivized to do this. If these incentives are reversed to lure manufacturing back home, it would provide a more balanced benefit to more people – but this is counter to the self-interest of the manufacturers and they have much more influence over our government than we do.
The free market ideology has left most of us in the dust. It has slowly destroyed our planet, made us obese, riddled our bodies with toxic substances, and emptied our wallets. As it turns out, the free market is really just an excuse to exploit us. Polluting, poisoning, and exploiting will never be optimal. There will always be imbalance and losers when people act in their own self interest. We know from our own experience that people who act in their own self interests are the biggest assholes in our lives – the same can be said about free market proponents.
President Reagan was right – the free market really is magic – it is an illusion performed with slight-of-hand and distraction.