Reprinted from Common Dreams
We don't live in a 'free market' system, but rather an economic system controlled by the corporate and private interests who have written the rules to benefit themselves.
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The ruling dogma of our political economy is corporatism. Corporatism claims to draw legitimacy from the free market theory that all vendors who do not meet market demands will go under. Corporatism uses this illusion to exert power over all aspects of our political economy.
Free markets, corporatists believe, are the best mechanism to allocate resources for the exchange of goods and services. They believe markets free of regulation, taxation or competition from government enterprises produce the best results. Their favorite metaphor is Adam Smith's "invisible hand" that produces the greatest good for the greatest number of people by the exertions of many willing sellers and many willing buyers (Adam Smith, they neglected to add, favored public works, public education and social safety nets like decent wages and public welfare as needed.)
Many things intrude on free market theories including military expenditures, wars, taxation, public infrastructure, health and safety regulation and governments' emergency duties. What financier George Soros has called "market fundamentalism," is opposed to any interference with free markets. Yet, corporatism makes massive exceptions that rig markets and tilt the seller-buyer balance heavily in favor of the former who become bigger and bigger global corporations.
Market critics call this hypocrisy. Corporations push for larger military budgets, which have concentrated power in ever fewer military contractors. What are less recognized and more part of the culture of acceptance are the other interferences with free markets, which corporate power has entrenched so deeply that they are rarely part of any political or election-time debate.
Let this point be made in the form of questions rarely asked and therefore rarely answered.
Can there be a free market without freedom of contract? Corporatism has stripped consumers of freedom of contract with fine-print standard-form contracts that become more dictatorial every decade. They now often take away consumers rights to go to court for their grievances via compulsory arbitration clauses. They stipulate that the vendors can change the contract anyway they want -- called unilateral modification -- which takes away the last vestiges of consumer bargaining power. An example is the unilateral changes in what you have to pay in penalties, late fees or any hundreds of fees hidden in the fine print. And you can't shop around because companies don't compete over the fine print. (See faircontracts.org.)
Can there be a free market if workers cannot join together to bargain with large employers whose investors have expanding freedom to form companies, holding companies, subsidiaries, joint ventures and partnerships to advance their bargaining power? Moreover, in comparison with the freedom of investors, workers are besieged with union-busting intimidations, lockouts and a system of corporate-driven labor laws that present far more obstacles to go through than is the case with the labor laws of other Western nations.
Can there be a free market without strong and comprehensive anti-monopoly, anti-cartel and other laws against the myriad of anti-competitive practices that Adam Smith alluded to back in 1776 when he warned of the motives when businessmen gather together?
Today, the antitrust laws are weak, dated and little enforced with puny budgets.
For example, thousands of joint ventures between direct competitors are being formed without concern of the moribund antitrust police. There is globalization of businesses without globalization of law enforcement. Big companies can leverage the differences between nations in a race to the bottom to unfairly gain market power against buyers, workers and small businesses.
Can there be a free market without a free market of retaining lawyers to pursue wrongful injuries and fraud by both direct negotiation with the perpetrators or resorting to open, public courts? In our country, such private disputes are not socialized by government. They are given over to a market system of legal and other supplementary services. Yet corporatism strives strongly to block or limit, through captive legislators, access to the courts or tie the hands of judges and juries, the only people who see, hear and evaluate the evidence in each case.
Can there be a free market when corporatists produce crony capitalism or torrents of corporate welfare tax escapes, subsidies, handouts and bailouts that rig markets against other smaller businesses that are playing by the rules of the market?
Can there be a free market when corporate-managed trade agreements, such as NAFTA and the World Trade Organization (WTO), subordinate civic efforts to secure better labor, environmental and consumer treatments to the supremacy of commercial trade? (See http://www.citizen.org/trade/.)
Finally, can there be a free market when the banks fund and control the powerful, secretive Federal Reserve that tightly regulates interest rates and can buy trillions of dollars in bonds (aka quantitative easing -- QE) to juice the stock markets and the banks, while tens of millions of savers receive less than half of one percent in interest on their savings? Libertarians, to their credit, have noted this abuse by this corporate government more clearly than have many liberals.
There are other corporate controls against the free market, such as politically extending already lengthy patent monopolies to ward off competition by, for instance, generic drug producers.