The Free Market Myth

Robert Reich writes that "the free market" is a myth. That has been proven true yet again during the pandemic:

How have a relative handful of billionaires – whose vast fortunes have soared even during the pandemic – convinced the vast majority of the public that their wealth shouldn’t be taxed in order to support the common good?

They have employed one of the oldest methods used by the wealthy to maintain wealth and power – a belief system that portrays wealth and power in the hands of a few as natural and inevitable.

If you amass a billion dollars you must deserve it because the market has awarded you that much. If you barely scrape by you have only yourself to blame. If millions of people are unemployed or their paychecks are shrinking or they have to work two or three jobs and have no idea what they’ll be earning next month or even next week, that’s unfortunate but it’s the outcome of market forces.

There could be no more poisonous idea. But, over the last fifty years, it is an idea that has gained the status of conventional wisdom:

According to this view, whatever we might do to reduce inequality or economic insecurity – to make the economy work for most of us – runs the risk of distorting the market and causing it to be less efficient, or of unintended consequences that may end up harming us. The “free market” is to be preferred over “government”.

But government sets up markets. And it can change them:

The interminable debate over whether the “free market” is better than “government” makes it impossible for us to examine who exercises this power, how they benefit from doing so and whether such rules need to be altered so that more people benefit from them. The myth of market fundamentalism is therefore highly useful to those who do not wish such an examination to be undertaken.

It’s no accident that those with disproportionate influence over the rules of the market – who are the largest beneficiaries of how the rules have been designed and adapted – are also among the most vehement supporters of the “free market”, and the most ardent advocates of the relative superiority of the market over government.

The debate over market v government serves to distract the public from the underlying realities of how the rules are generated and changed, from the power of the moneyed interests over this process, and the extent to which they gain from the results. In other words, not only do these “free market” advocates want the public to agree with them about the superiority of the market, but also about the central importance of the interminable and distracting debate over whether the market or the government should prevail.

 Politics these days has become an exercise in distraction. At all costs, we must not see the man behind the curtain.

Image: youtube.com