Galatea and Pygmalion, carved by Étienne Maurice Falconet, 1763, from the Hermitage. Loosely translated as Markets Carved From Stone Come to Life.

Ask any Tea Party member or politician what they mean by market, and you are likely to hear about how consumers decide the price of wheat or oil, accompanied by a strong scent of barnyard. None of them have a clue, because the “market” isn’t a thing that can be described, it is the condition of life on earth, the air they breathe, the organizing focus of their tiny lives. It’s like asking them to describe Heaven, or a quantum state, or their love for their children. It’s created by the Almighty to be too wonderful for words. It’s not possible, beyond all but complex statistic equations that only give probabilities. Or it’s the highest and most important point of their existence, human, but beyond human understanding.

Philip Mirowski gives us a description in his book on Neoliberalism, Never Let a Serious Crisis Go to Waste. The Market is “… an information processor more powerful than any human brain, but essentially patterned upon brain/computation metaphors.” P. 54. It seems to involve the discovery of things that consumers didn’t know they wanted, and the prices at which such things can be made, bought and sold.

From this starting point, Mirowski shows the two competing views of the neoliberals.

1. Fredrich Hayek, the founder of the movement, says that markets arise spontaneously wherever humans dwell. As time goes by, the markets become more and more complex, processing the needs and desires of the many individuals they encompass into signals and actions. This spontaneous growth leads to a system that is beyond the power of any human mind or minds to capture, and thus any interference with its workings is bound to fail. Regulations and rules cannot begin to contain its wonders, and the State has to bow before its wondrous powers. Even in a crisis like the Great Crash, any effort of the State to mitigate the damage will create even worse outcomes.

2. The German ordoliberals preach that markets can only exist through actions of the State. Markets must operate within rules and regulations which the State creates. Through the efforts of the State, markets become embedded in the day to day lives of the subjects of the State.

Thus, the concept of market embodies two opposite states simultaneously. Whichever theory suits the needs of the moment for the neoliberal project becomes the active theory. That explains the apparent contradictions of the Postmodern Republican Party. For example, farm subsidies created by the State are good, because they create boundaries for the operations of the markets for food. Food stamps are bad, because they interfere with the price signals by allowing people who don’t make much money from their miserable jobs to buy food anyway. The US is the freest society in the world, but people in the US must be starved into submission or else they won’t work in the production operations of the Market at a satisfactory price. The US is the strongest free market economy the world has ever known, but we must destroy the economy rather than submit to regulation of the market for health care. The financial markets depend on the availability of high-quality collateral to finance the repo markets, but we must destroy the highest quality collateral, Treasury Notes and Bills, rather than increase the debt ceiling.

It seems to me that the dominant powers in the Postmodern Republican Party act on the strong state theory. They spend their political influence using that quantum state to protect their current wealth and to create legislation that will increase their ability to make tons more money in the future. Thus, the creepy Walton heirs have a life goal of killing the Estate Tax. The Koch Brothers use much cheaper state legislation to crush labor unions. Neither has any interest in allowing spontaneous organizations like labor unions or Occupy to arise, because such movements threaten their existing wealth. The strong state must be used to smash this nasty interference with the Market.

We need to remember that this all sprang from economics, a field of study supposedly devoted to objective intellectual study of how people produce, buy and sell, and how money works and stuff like that. The idea of “markets” was used to model production, buying and selling. It was just a simplification with an actual definition that was used to explain things.

Markets have become a Real Boy!

But in today’s excellent virtual world made real, Markets have moved from the realm of cold abstraction to the realm of actual things. Any inadequacy or gaps in the Market and its ability to serve its owners, the feral rich oligarchy, can and will be fixed by the Postmodern Republican Party and its counterpart, the Postmodern Democratic Party. It knows all and controls all, and can only grow in power and wonderousness.

Even better, the neoliberals are working to create a new understanding of the role for individuals in the Market, Homo Economicus, the self-centered perfectly rational utility maximizer. That’s you. It feels like The Road to Serfdom, doesn’t it?



I read a lot of books.