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Fetishized Markets and the Death of Democracy

To the extent we limit the role of government to enforcement of decisions made by unaccountable corporate executives, we surrender our ability to control our society to the rich people who own and control corporations.

The reach of the ideology of “free markets” into public mythology is put nicely by commenter jonerik, who said “the right has … fetishized ‘the market’ in our political discourse.” Nicely put. Not only economists, but people from other fields like the lawyer and judge Richard Posner and the American theologian Michael Novak (The Spirit of Democratic Capitalism) use their training to argue for this outcome, and have, as commenter jonerik says, made it impossible to discuss government solutions to economic problems.

Free market advocates use arguments in the form of the ticking time bomb: they pose an extreme scenario which ends with what the speaker thinks is a moral dilemma that leaves only one viable solution. Here’s commenter mulp from the same thread:

The argument is that the fossil fuel extraction be halted: shutdown coal mining, shutdown Keystone and the tar sands, shutdown fracking, shutdown oil imports from dictatorships, shutdown deep sea drilling, etc.

Ok, who gets the limits [sic] supply of gasoline, heating oil, propane, natural gas, that would be produced in dwindling quantities as existing oil and gas production depleted the resources?

Would the government pick the winners who got to fill their gas tanks, or a government technocrats deciding who gets heating oil.

That happened in 2008, so we know the answer. The geniuses on Wall Street crashed the brilliant market system they created and caused massive fear and disruption. Who made the decisions about who would be rescued and who would “foam the runway” to provide a soft landing for whom? Those stalwarts of the Free Market, the gigantic Wall Street banks, went running to the government technocrats, and the government picked the winners and losers.

The plain fact is that the Transnational Criminal Organizations on Wall Street (H/T Marcy Wheeler) can’t operate without government support and protection. The same thing is true about most of the markets for goods and services in Our Capitalism. What happens to the Disney Complex when the copyright on the mouse expires, as if Congress would let it? What happens to Monsanto and its genetically modified seeds if it can’t enforce its monopoly? What about big Pharma, which profits hugely because government is barred from bargaining over drug prices? This last one is so serious that the gigantic drug companies are trying to use trade treaties to force India to stop competing over the actual price of production of drugs.

On the other hand, the proponents of the free markets are wildly supportive of government use of force to insure that citizens have no alternative to participating in their free market. Or, as Posner says

When transaction costs are low, the market is, virtually by definition, the most efficient method of allocating resources. Attempts to by-pass the market will therefore be discouraged by a legal system bent on promoting efficiency. 85 Col. Law Rev. 1193, 1196 (1985)

By efficiency, Posner means wealth maximization, without regard to who gets that wealth. Posner claims not to think that “efficiency is or ought to be the only social value considered by legislatures and courts in creating and interpreting the rules of the criminal law.” But apparently Preet Bahara thinks so, because the US Attorney for the Southern District of New York hasn’t investigated, let alone prosecuted, any Wall Street executives, except the ones who bypassed the wonderfully efficient markets by trading on inside information. Courts are available to enforce Monsanto’s contractural demand that farmers not save seeds for future crops. And organic farmers apparently can’t sue Monsanto for contaminating their fields with genetically modified pollens. Instead, the USDA recommends that organic farmers buy insurance against losses because their products are no longer eligible for treatment as organic. I’m just sure Posner would approve.

Free market fetishists are verbally violent in their rejection of the idea that governments can make good decisions about anything except who to lock up. It doesn’t seem to bother them that all these decisions are made by collusion between legislators and administrators and corporations. They prefer to let CEOs of the corporations that own the oil and gas make the decisions about who gets gasoline and at what cost. They prefer to let drug companies gouge Medicare and themselves. They prefer to let Monsanto decide what they can eat, and it’s fine that government enforces that decision.

Traditionally we think of government as a tool society uses to make things better for all of us. To the extent we limit the role of government to enforcement of decisions made by unaccountable corporate executives, we surrender our ability to control our society to the rich people who own and control corporations. That is profoundly anti-democratic.

Photo by Parco Moggioli, used under Creative Commons license

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I read a lot of books.