(originally published by The Crisis Papers)
"What's good for General Motors is good for the country."
This is the most famous quotation never said by Charles Wilson, Dwight Eisenhower's Secretary of Defense. (He actually said "For years I thought that what was good for our country was good for General Motors, and vice versa.")
Still, the misquote nicely summarizes the central dogma of libertarianism and right-wing regressivism: "free market absolutism" -- the conviction that the "invisible hand" of the unconstrained and unregulated free market will always result in the greatest benefit for the public at large. As Milton and Rose Friedman put it: "A free market [co-ordinates] the activity of millions of people, each seeking his own interest, in such a way as to make everyone better off.." (Free to Choose, pp 13-4). Note the universal quantifier, "everyone." Good for each, good for all.
The dogma of market absolutism gains some credibility from the fact that it is at least a half-truth. No doubt, the individual's striving to maximize self-interested gain accounts for numerous improvements in the quality of life in industrial countries. Presumably, the inventors and developers of computers and the internet were more concerned with their own economic prospects than they were of the "social benefits" thereof. (Bill Gates' benevolence was manifested later as a result of, his economic success, with the establishment of The Gates Foundation). Similarly, many scientific, scholarly, technological and artistic achievements, motivated primarily by self-interest and self-satisfaction, benefit society at large "as if by an invisible hand."
The dogmatism of free market absolutism resides in the belief that the unregulated market never fails to be beneficial to all; the belief, in other words, that there are no malevolent effects of unconstrained market activity, no "back of the invisible hand." From this belief follows the insistence that the free market is self-correcting, and that there is thus no need for regulation that, in Ronald Reagan's enduring words, "government is not the solution to our problems, government is the problem."
Market absolutism is a "dogma" in the same sense that creationism and biblical inerrancy are dogmas; it is accepted "on faith" despite clear and compelling evidence that it is false. Moreover, it is a "keystone belief:" refute market absolutism, and the entire structure of libertarianism collapses. Not that this significantly alters the convictions of the libertarian and regressive true-believer, any more than the existence of fossils or the science of molecular biology inclines the religions fundamentalist to accept evolution.
Be that as it may, for those open to evidence and plain common sense, here are a few compelling reasons to reject the dogma of market absolutism reasons to believe that what is good for an individual corporate stockholder may not be good for the public in general. I focus below on corporate behavior since corporations are far and away the most significant "players" in both national and multi-national economic activity. And after all, didn't the "conservative" majority in the Supreme Court rule, in Citizens United v. FEC that corporations are "persons"?
Common to all the cases listed below is the corporate imperative to maximize profits and the return on stockholder investment. This imperative is called "fiduciary responsibility" and it is required by law. Accordingly, a failure to meet this responsibility can trigger a stockholder's law suit against a corporation and its executives.
Private Prisons. Good for the corporations: more prisoners, "three strikes" laws, mandatory sentencing. The cost to society: less rehabilitation and early release, increased government expenditures and taxes. It is noteworthy that the United States has the largest prisoner to population ratio in the industrialized world.
The Tobacco Industry.Good for the corporation: More sales and more customers, the younger the better, unregulated advertising of products. Cost to society: half a million premature deaths per year due to smoking, cost of medical treatment of tobacco related diseases.
Fast ("Junk") Food.Good for the corporation: Increased sales and profits. Cost to society: obesity epidemic, diseases due to malnourishment (e.g., cardiovascular disease)
Privatized Health Insurance.