They've been shown to be wrong time and time again. And their policies have led to widespread disaster and misery for millions of people.
Who am I talking about?
The NeoCons and their wrong-headed views on Iraq?
Nope, I'm talking about free-market economists.
No group of "experts" has a worse track record on accurate information about how our world really works. And yet, mysteriously, free-market economists are still held in reverence and awe by many. And their proclamations are hailed as the gospel truth by everyone from politicians to academia to the mainstream media.
Free-market economics seemingly got an enormous boost in credibility in the 1980s and has reigned supreme as the only conceivable policy for running America's economy ever since.
There's only one problem with free-market economists and their followers: they're full of crap and they have a dismal track record on the truth. And worse, the world simply doesn't operate the way they believe it does.
Free-market economists are rabid advocates of a unfettered, dog-eat-dog, ruthless form of capitalism. Leaving everything to the "free market" is the best way to run a society, they maintain. And at the end of the day, no other economic system can possibly compete with capitalism, they say.
As "Exhibit A," the free-market economists proudly point to capitalism's vanquishing of the Soviet Union's style of communism in the Cold War.
What more proof could one want that capitalism is the best way to create wealth and prosperity?
Actually, in the years since the Cold War ended, a few dissenting voices have started to speak up about the supposed superiority of unfettered capitalism.
First, there is the issue of whether the United States really prevailed in the Cold War, after all. A number of commentators have pointed out that, without enormous sums we borrowed from Japan in the 1980s, the U.S. wouldn't have "won" the Cold War.
Indeed, as the brilliant author Chalmers Johnson has pointed, out, it was really Japan, not the U.S. that won the Cold War. Indeed, the decade of the 1980s was nicely summed up by MIT economist Lester Thurow when he wrote: "We borrowed a trillion dollars from the Japanese and threw a party."
I should point out here the irony of celebrating an economic system that is totally dependent on vast amount of foreign capital in order to function. And make no mistake, no matter how one views the Japanese economy, it is definitely NOT anything that a Western economist would recognize as "capitalism."
Indeed, the Japanese model couldn't be further removed from U.S.-style economics. In Japan, the nation's economic destiny is shaped by powerful technocrats at the Ministry of Finance. Industrial policy is set by the government, rather than determined the whims of the private sector. It is a heavily regulated system that is a million light years removed from American-style "capitalism."
The creator of the progressive site, BeggarsCanBeChoosers.com, Marc McDonald is an award-winning journalist who worked for 15 years for several Texas newspapers, including the Fort Worth Star-Telegram, before he quit his day job and set up shop in cyberspace in 1995. McDonald's articles have appeared in a number of popular progressive Web sites, including OpEdNews.com, BuzzFlash.com, Crooks and Liars, Salon.com, Progressive Daily Beacon, The Neil Rogers Show and The Raw Story. McDonald's Web articles have also been featured and reviewed by various national and international media, including CNN Headline News, the BBC, the Washington Post, USA Today and many more.
"If all the economists were laid end to end they couldnt reach a conclusion." GBShaw
It is time we all reevaluated, not only free market economics, but the entire belief system around unfettered capitalism. It should be blatantly obvious to all but the most closed minded and agendised given the example of this administrations rampant theft of our treasury on behalf of itself and GOP campaign donors that unchecked capitalism is little more than organised crime.
I believe it was Franz Fanon who noted that, "In America we have welfare for the rich and capitalism for the poor."
by
ardee D. (6 articles, 4 quicklinks, 1 diaries, 2388 comments)
on Monday, October 29, 2007 at 8:39:45 AM
I believe you had a small business before as far as I remember? It would be very important for all of us to know if the free-marketr system was to your advantage or not. See, we have here the ' flying in' adepts of free-market religion who claim that we here are the enemies of GOD-CAPITALISM which only means freedom, free enterprise and prosperity for all. How did it work for you, a small - business owner? It would be a very good contribution.
by
Mark Sashine (46 articles, 19 quicklinks, 235 diaries, 3358 comments)
on Monday, October 29, 2007 at 9:13:58 AM
I owned a small trucking company, specialising in delivery of home improvement and building supplies. The difference between a small business and a large corporation is that one gets government welfare while the other is a target for every tax termite , blood sucking parasite and leach imaginable. Sound bitter?
Look, United Fruit can get our government to overthrow Guatemala to aid its bottom line, but a small company is at the mercy of every regulation, fee, insurance scam and as much overhead as one can handle, and then some. Not to say that there are not successful small busimnesses, there certainly are, but they flourish despite the rules not because of them.
I do not diminish the need for regulation but rail against the dishonesty of sucking the blood of the powerless while catering to those who elect and prop up politicians. Even the tax code favors the large corporation and feasts of fthe pallid corpses of the small guys. Hyperbole much?...
I made a great gross, paid wages, health insurance, fuel costs, cargo and liability insurances, leasing costs, truck and trailer maintenance and leasing fees, tires, oil, etal and was proud to do it, though it cost me a seven day work week and countless headaches. But as costs increased and the IRS became increasingly rapacious, in order, I suspect, to cover our nations growing burden of debt by forcing the small guys to accept a burden that the big guys refused to share, it all got a bit too much , at least for me.
I am now a union member and wage guy, I make great money and have a terrific benefits package. I hope that my former employees have landed on their feet too, but just couldnt continue to live with a dichotomous system that burdened me precisely because that burden was inequitably shared. Just me , perhaps, but perhaps not........
by
ardee D. (6 articles, 4 quicklinks, 1 diaries, 2388 comments)
on Thursday, November 1, 2007 at 9:23:34 AM
It should be noted that I was in competition with larger companies for the business of our customers. These companies could offer pricing based upon exemptions they had wrung out of our government, tax breaks given those of size not available to those of smaller and less politically connected stature. Far from a level playing field, though my sales pitch was that of personal service and access to the boss and did win me a loyal customer base. That is until the crunch hit them and they were more receptive to cost reduction due to economic necesities.
This sounds more than a bit self serving and I have somehow missed the mark in explaining how things were I fear. It has been more than a decade now since I fought the good fight. There is a terrible injustice out there and it is due to rampant capitalism and the unregulation of the large that harms th esmall.
by
ardee D. (6 articles, 4 quicklinks, 1 diaries, 2388 comments)
on Thursday, November 1, 2007 at 9:31:56 AM
Well, I am a small business owner.. I run an auto collision shop... I discovered, a long time ago, that there is NO SUCH THING as "FREE ENTERPRISE." At least not as it relates to my business...
Now I am going to compare myself to a doctor, and you may recognize a similar pattern.
Insurance Companies tell me what I am allowed to charge for an hourly rate, they tell me what kind of parts I am allowed to buy, and they tell me how much time I am allowed to spend on a given project, like straightening a frame which takes a little longer than someone who has never worked in a shop might predict.
Now, If I was to become a Direct Repair shop, it would become even more difficult, even though the insurance company would be feeding me work.. to become a direct repair shop, I would have to take a lower rate than I do now, I would have to set up and maintain a desk for an insurance company employee, at "my" shop, so that they can keep an eye on me.. Is that FREE enterprise?
by way of comparison, I charge $46 per hour.. Insurance companies will pay me somewhere between $38 and 46 depending on who the company happens to be. A mechanic shop typically charges between $65 and $80 per hour and gets it, even though mechanical work is no more complicated than my work, and mechanic tools cost no more than my tools.. In fact, they are basically the same tools!! (with very few exceptions..) they have a $60,000 dynamometer, I have a $60,000 spray booth, and a $30,000 frame puller..
I can make money because I OWN my shop.. however, if I had to rent, or was paying a mortgauge? NO WAY could I survive, unless I was a direct repair facility, because the insurance companies tend to tell their customers to stay away from shops like mine because "we can't guarantee their work"
Meanwhile if a customer of the DRP shop comes back to the insurance company with a problem, the insurance company tells the customer to go to the shop, they have nothing to do with work related problems... (never mind the fact that they tell the shop HOW TO DO THEIR JOB, EVERY STEP OF THE WAY.....)
Free Enterprise???? We have not had "free Enterprise" in the United States, for quite some time!
It would, however, be nice to experience a "FREE MARKET" before passing judgement on it... Since none of us have ever lived in such a system, none of us can possibly know that it is a failure....
Ciao, CZ
by
steve scheetz (1 articles, 0 quicklinks, 1 diaries, 494 comments)
on Monday, October 29, 2007 at 9:43:35 AM
The bottomline here is that the system us run like a religion, a Catholic one comes to mind- when they ask for the money now and promise Paradise later. But then all the systems are like that and as such we should drop the hypocrisy.
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Mark Sashine (46 articles, 19 quicklinks, 235 diaries, 3358 comments)
on Monday, October 29, 2007 at 1:04:43 PM
Marc McDonald obviously has not taken the time to study economics, for if he had, he would understand that the borrowing of money from other countries was/is not part of a “free market” economic model, but rather a method to prop-up the huge socialist bureaucracy including the illegal entitlements such as Medicare, Medicaid and Social Security.
After reading Mr. McDonald’s essay, my first reaction was that he was most likely still in grade school and had not had the opportunity to study civics, economics and history. I then read his brief biography and then realized that he is most likely another adult victim of government run schools.
by
Mark Bennett (0 articles, 0 quicklinks, 0 diaries, 47 comments)
on Monday, October 29, 2007 at 11:49:09 AM
Uh, I never said that the borrowing of money from other countries is "part of the free-market economic model." You missed my point entirely. In my piece, I was taking "free-market" economists to task for claiming vindication for their prescription for creating prosperity in America----when in fact, their "free-market" ideas had little to do with any prosperity America enjoyed in the 1980s (instead, it was the trillion dollars we borrowed from Japan). One other note: I always find it interesting how the Rush Limbaugh crowd slams the likes of Medicare as "socialist" and yet they never have one word to say about the $300 billion in corporate welfare that our tax dollars are spent on every year. They don't have any problem with our hard-earned tax dollars going to closed, no-bid contracts at Bush's billionaire buddies at Halliburton. I get the feeling that most of the Rush Limbaugh crowd (as well as their hero Bush) wouldn't know "free-market economics" or capitalism, if it ran over them on the highway.
by
Marc McDonald (48 articles, 0 quicklinks, 0 diaries, 10 comments)
on Monday, October 29, 2007 at 2:13:20 PM
The reasons for borrowing vast sums of money have absolutely nothing whatsoever to do with Medicare or any other so-called socialist programs, and anyone with a crumb of intelligence and a bit of knowledge of the amounts we spend on the military knows this full well.
I am constantly flabbergasted at the way folks like this poster have been so thoroughly duped and manipulated. It is a real pity.
by
ardee D. (6 articles, 4 quicklinks, 1 diaries, 2388 comments)
on Friday, November 2, 2007 at 8:42:26 AM
Steve Sheetz business example is an excellent illustration at how ridiculous our so called free market capitalism is now functioning.
Large corporations have taken over our government with bribes and campaign donations and are FREE to rape and pillage, that's what the FREE in free markets means. Tax abatement's, subsidies no bid contracts, bailouts, laws ignored and economic theory re written is what our big monopolies now possess. If the U.S. ever truly went to a true free market economy most businesses who rely on uncle sam would go under and that's quite a few.
Universities such as the Chicago school are heavily corporate funded and produce economic theories that tell us that business must be free, free from any responsibilities, free from taxes, free from having to pay a decent wage, free to go offshore to operate sweatshops, free from product liability, free to bribe the government for special favors or contracts, free to collect huge subsidies, free to take over our very own government and change anything that stands in the way of more profit.
One might say that free markets now means our greedy corporations are free to destroy America and its middle class by its unfettered lust for slave labor. China and its collection of American manufacturers is the irrefutable truth to this opinion.
by
Gary Denson (2 articles, 0 quicklinks, 1 diaries, 208 comments)
on Monday, October 29, 2007 at 10:23:27 PM
And yet, mysteriously, free-market economists are still held in reverence and awe by many. And their proclamations are hailed as the gospel truth by ... the mainstream media.
It is not so surprising that the mainstream media hails free market economic principles. An unfettered free market works (at least in the short term) very much to the benefit of large corporations like those that control the media. The problem is that these economic policies work to the disadvantage of small businesses and ordinary workers.
Unfortunately, too many people listen to the media without the necessary critical ear and they are led to favor policies that are against their own interests.
The free market religion was followed leading up to the great depression and again (history repeating itself) since the administration of Ronald Regan, but it has really taken off with the current Bush Administration. Not surprisingly, these policies seem to be leading us into the same kind of problems we experienced in 1929.
by
PrMaine (8 articles, 5 quicklinks, 1 diaries, 278 comments)
on Tuesday, October 30, 2007 at 8:47:46 AM
