The Free Market: A False Idol After All?
FOR more than a quarter-century, the dominant idea guiding economic policy in the United States and much of the globe has been that the market is unfailingly wise. So wise that the proper role for government is to steer clear and not mess with the gusher of wealth that will flow, trickling down to the every level of society, if only the market is left to do its magic.
That notion has carried the day as industries have been unshackled from regulation, and as taxes have been rolled back, along with the oversight powers of government. Faith in markets has held sway as insurance companies have fended off calls for more government-financed health care, and as banks have engineered webs of finance that have turned houses from mere abodes into assets traded like dot-com stocks.
But lately, a striking unease with market forces has entered the conversation. The world confronts problems of staggering complexity and consequence, from a shortage of credit following the mortgage meltdown, to the threat of global warming. Regulation - nasty talk in some quarters, synonymous with pointy-headed bureaucrats choking the market - is suddenly being demanded from unexpected places.
The Bush administration and the Federal Reserve have in recent weeks put aside laissez-faire rhetoric to wade into real estate, wielding new rules and deals they say are necessary to protect Americans from predatory bankers - the same bankers who, only a year ago, were being lauded for creativity. Were the market left to its own devices, millions could lose their homes, the administration now says.
Central banks on both sides of the Atlantic are coordinating campaigns to flush cash through the global economy, lest frightened lenders hoard capital and suffocate growth. In Bali this month, world leaders gathered in the name of striking agreement to slow climate change.
Adam Smith used the metaphor of the invisible hand to describe how markets should function: With everyone at liberty to pursue self-interest, the market omnisciently distributes goods and capital to maximize the benefits for all. Since the Reagan administration, that idea has weighed in as a veritable holy commandment, with the economist Milton Friedman cast as Moses.
As the cold war ended and Communism retreated, the invisible hand seemed to monopolize economic thinking. Even China, controlled by a nominally Communist party, has blessed private entrepreneurs and foreign investment. In Latin America, the International Monetary Fund financed governments that embraced market forces while shunning those that were resistant.
But now the invisible hand is being asked to account for what it has wrought. In this country, many economic complaints - from the widening gap between rich and poor to the expense of higher education - are being dusted for its fingerprints.
After two decades of disappointing economic growth, several Latin American countries have spurned the I.M.F. while embracing the finance and thinking of Venezuela’s avowedly Socialist leader, Hugo Chávez. China’s leaders, though still devoted to “reform and opening,” are keeping tight control on the value of the currency while steering capital to powerful state-owned companies, concerned that freer markets could throw millions of peasants out of work.
Throughout history, regulation has tended to gain favor on the heels of free enterprise run amok. The monopolistic excesses of the Robber Barons led to antitrust laws. Not by accident did strict new accounting rules follow the unmasking of fraud at Enron and WorldCom. Now, the subprime fiasco and a still unfolding wave of home foreclosures are prompting many to call for new rules.
“We’re revisiting the question of market flows with a deservedly wary eye,” said Jared Bernstein, senior economist at the liberal Economic Policy Institute in Washington. “For decades, economists and political elites have argued that any time you regulate any aspect of the economy, you’re slipping the handcuffs on the invisible hand. That’s demonstrably wrong in lots of ways.”
But if markets can inflict pain, the harm from trying to tame them is often worse, argue those who would let the invisible hand carry on. The new regulatory tilt threatens to tie up innovation in a straitjacket of bureaucratic nannying while slowing the global economy, they say.
“Every regulation reduces people’s freedom,” said David R. Henderson, a libertarian economist at Stanford University’s Hoover Institution. “The more regulation we get, the worse we do.”
Mr. Henderson is critical of the Bush administration’s effort to freeze mortgage rates, and the new rules proposed by the Fed intended to curb nefarious lending. They undermine the sanctity of contracts, he said, while making mortgages harder to gain for everyone.
“The way they justify it is that you’ve got to protect the stupid people who can’t read a contract,” Mr. Henderson said. “But they’re treating everyone as stupid.”
But in Washington, and under the roofs of many homes now worth less than a year ago, there appears to be a shift in the nation’s often-ambivalent attitude about regulation.
Back in the boom, banks made loans to homeowners who did not have to prove their ability to pay, then quickly sold the loans to other companies. By the time it emerged that a lot of homeowners could not pay, these loans had been pooled with other loans and chopped into strange new paper assets that were sold to unsuspecting buyers around the globe. The subsequent reckoning has forced major banks to write off vast sums of money.
“Here you had all these people who were supposed to be sophisticated investors, and it turns out they were buying billions of dollars worth of debt where they didn’t even understand what they owned,” said Dean Baker, co-director of the liberal Center for Economic and Policy Research. “There is going to be a willingness to re-regulate financial markets.”
Liberal critics have long asserted that dogmatic devotion to market forces has skewed American society toward those of greatest means. More wealth is being concentrated in fewer hands, with rich people capturing the best housing, private education and health care services, and, as the argument goes, only crumbs left for everyone else.
That critique informs proposals from Democrats vying for the presidency, as they debate how best to expand access to health care and ways to shift the tax burden to the rich. They are in essence calling for market intervention to redress imbalances. With the gap between the richest and poorest now greater than it has been since the 1920s, these pitches have emerged as central components of their campaigns
More notable, though, is how fervent proponents of unfettered market forces have lately come to embrace regulation.
The Bush administration, in seeking to freeze mortgage rates for some homeowners, put Treasury Secretary Henry Paulson Jr. in charge of the campaign. Mr. Paulson not long ago ran the Wall Street giant Goldman Sachs. Now, he is demanding that banks accept smaller payments than promised, while describing the market as a fallible thing in need of supervision.
“The government acted to prevent a market failure and to try to avoid unnecessary harm,” he said at a public meeting in California.
More than a decade ago, when Bill Clinton occupied the White House, he pushed through the landmark North American Free Trade Agreement, which linked the fortunes of Mexico and the United States. But if his wife or one of her Democratic rivals captures the White House next year, they promise a more skeptical look at trade deals.
Some argue that the push back against market forces is a momentary pause in a steady march toward unfettered capitalism. The libertarian Cato Institute recently issued a report in which it found that economic freedom - shorthand for smaller government and fewer regulations - has never been greater.
“Global economic growth significantly increases with the growth of the world’s economic freedom,” said Ian Vásquez, director of Cato’s center for global liberty and prosperity.
Few policymakers have a beef with that characterization as a generality. But when things go wrong, demands grow for the government to step in and make them right.
“Untethered market forces lead to bad things,” said Mr. Bernstein of the Economic Policy Institute. “You simply can’t run an economy as complicated as ours on ideology alone.”
Copyright 2007 The New York Times Company
“Global economic growth significantly increases with the growth of the world’s economic freedom,” said Ian Vásquez, director of Cato’s center for global liberty and prosperity.
Perhaps this should read:
The economic growth of the global elite significantly increases with the growth of their economic freedom.
The trouble with capitalism and socialism is that they are too trusting of human nature. But socialism at least acknowledges that humans are social creatures and you cannot set up an antagonistic social system and hope to sustain it.
…if only the market is left to do its magic.
Unbounded greed?
Wow! Giving the benefit of recognizing any aspect of human nature to socialism sure seems backwards to me. I always thought it was capitalism’s regognition and exploitation of the important truths about human nature that made it so successful despite all the social evils that it produces.
Socialism, it seems to me, is almost exactly the opposite. It is capable of producing maximal social benefits only through the imposition of regulatory controls on the instinctive self-interest of individuals and the corporate ‘legal persons’ that do their bidding. In other words, socialism only works to the extent that it is not naive about the realities of human nature which doesn’t really differ all that much from that of other living things except, perhaps, in its excesses when totally unbound.
Free- anything is a general class of problems which hinge either on the uncomputable, a paradox, or some sort of singularity. None of them produce fruit.
Free market. Freed exactly from what? Government intervention? In an era in which most real decision-making authority, command over wealth, etc. is in private hands — the market now needs to be freed from itself.
Anyone with a grasp of mathematics can easily see that enlarged markets means greater disparity of wealth and that most of the wealth accrues to an increasingly small minority.
The problem is, the Earth intact has no value. Her resources do!
The magic of the evolving Earth nuturing life is of no value because man can do it better. (We are led to believe)
A level playing field. There are many small businesses which compete. There are winners. The winners have increased power, financial and otherwise. They exterminate or assimilate the rest of their competition. They become juggernauts bound by no goal but profit, and wield more power than government. The merchant princes rule.
I don’t see any other way it can go, and it’s certainly gone that way here, as it has so many other times in history. True, our government puts some checks on the process with anti-monopoly laws but we can see that hasn’t stopped giant global corporations from taking over the government of our nation. And since corporations are clearly and unashamedly feudal states, I don’t like them in charge of everything.
But socialism at least acknowledges that humans are social creatures and you cannot set up an antagonistic social system and hope to sustain it.
Socialism seems wise to me because it is not extreme. It allows some goods and services to be provided by private industry, and some to be funded by the population as whole because they are essential to human survival.
Capitalism taken as the answer to everything is as bad as communism. Both are far too extreme in their philosphies. Either goes out of balance and becomes unworkable when it is applied to problems it cannot address well.
For instance, if my child is ill, I do not want to let an entrepeneur decide to price his healing based on how much the market will bear.
It is no coincidence that health care is one of the first dominos to fall in unbridled greedism. All for-profit (in the real sense, not some legalese sense) pursuits want returning customers. The goal in health care is probably the reverse: to heal/cure so that the patient does NOT need to continually return. There seems to be an extraordinarily conflict of interest with any for-profit health care system.
False Idol? See:
http://irvingnorman.com/master_image_htmls/1985_golden_calf_2.htm
Socialism is far from being a monolithic entity. At least potentially, it has as many differing adherents and implementations as any other political philosophy and thus is difficult to designate as either “wise” or “foolish” per se. The most prevalent model is probably the so-called “mixed economy” approach.
The critical factor, as mentioned above, is recognition of the need for some social counterbalancing of individual self-interest, especially that which is amplified through unfettered ‘rights’ of ‘legal personhood’ accorded to corporate bodies.
In theory, in a true democracy, one can expect the “people’s representatives” to provide such a counterbalance through oversight and statutory control measures where appropriate. In practice, that expectation breaks down where those representatives themselves become hired advocates for, rather than regulators of, those same private interests.
Quite naturally, exportation of the latter form of ‘freedom and democracy’, by force or arms if necessary, is highly favored by those who succeed in establishing it at home.
Funny how people seem to have forgotten that Adam Smith’s “Invisible Hand” worked in concert with the “Visible Hand”, which is government regulation.
That the free market is fair and wise is right up there with other FAIRy tales.
The trouble with pure capitalism is that there are some things that a just and fair society should have that you just can’t put a price tag on, like health care, and clean air and water.
Pure socialism, if there is such a thing, doesn’t really work either, because it takes away from a person’s drive to succeed.
Just like everything, you need a mix.
The two primary purposes of modern governments are enforcing contracts and sanctioning titles. Neither abstraction exists without government intervention, nor can any market that of necessity is dependent upon both, and in fact money is merely a form of easily transferable contract backed by a government.
Ignorance of the above is the basic flaw in Libertarianism, and of course also of the more simplistic nonsense known as Conservatism. We’ll approach relearning of this once again the hard way now, and then forget the lessons quickly after the mess is cleaned up ……… assuming that it even can be anymore?
Funnier still is the wide acceptance of the cold war’s purported battles between communism and the democratic governance values of the “free world.” It must be admitted that the Stalinists played a very large role in accommodating that fiction, but capitalism was always the real opponent and common enemy. In any case, the ultimate winner certainly wasn’t democracy — at least not the democracy described by Lincoln and understood by most ordinary folks.
Adam Smith is most often quoted by people who have never read his work — or, at the most, have read only brief selected passages. Smith recognized the strengths of market mechanisms in the allocation of scarce resources, and the production efficiencies which can come from specialization of labor (which, in most cases, requires an investment of capital to allow processing of an appropriate volume of product). But Smith also pointed out some of the disadvantages of laissez faire and the need for governments (or some other overarching power) to regulate the behavior of capitalists. It is this balanced perspective which members of the Chicago School (and the Austrian school, before them) have lost, and of which most business writers and journalists are entirely ignorant.
It’s remarkable how many self-proclaimed Christians elevate a misunderstanding of Smith over the clear meaning of 1 Timothy 6:10 — the love of money is the root of all evil. Please note: not “money” (as so often misquoted), but “the love of money”. Modern capitalism, especially Friedman-style economics, is truly a form of idolatry. And the title of this article asks the wrong question, because ALL idols are false.
Even funnier still is the way “we’re” still supposed to believe a “free” market ever existed in the first place, or that humans will always do the “right” thing because it is in their best interest.
A free market means Enron and Joe’s Bakery play by the same rules, that Monsanto and the Anderson family farm play by the same rules, that Halliburton and Big Red’s Oil Services Co. play by the same rules. Is that they way our free market works? No? But it’s still called a free market, because it’s important that “we” continue to believe it is, while the Murdochs of the world are assisted in their quest to control as much money and property as humanely possible. Trump’s gone bankrupt a half-dozen times already, yet he’s still going strong. Free market at work is it?
Why not eliminate all driving laws? It’s not like it’s in one’s best interest to drive drunk, so no one would, right? Why not toss out all NFL rules - players would surely still play fair (and not take steroids), right? IRS? Americans would still pay taxes to keep the country running, wouldn’t they? Of course, if we ignore the thousands and thousands of corporate theft and pollution and outright destruction IN SPITE OF REGULATIONS IN PLACE, then, sure, we can all agree that everyone would be a good boy without regs. Sure they would.
To repeat, ‘the market’ is an abstraction, not existential. And by the way, there’s no such thing as magic, either.
Gorsegrower,
So true, regarding markets. The closest thing to a “free market” were the pre-capitalist ones - like Arab bazaars, or the market places I saw in poor peasant villages in Haiti - both buyer and seller have equal power over each other as they haggle over a kilo of rice. But in capitalist free-market industrial cultures, this is never true. Buyer and seller are usually always at positions of extreme inequality based on their positions as owners of capital or owners of their bodies and labor, but little else. So, where’s the “free” part to these “free markets”?
Rjmart01 summarized Adam Smiths take on this - that the apologists for capitalism seem to ignore.
As far Frank’s remark regarding Enron playing on the same field with Joe’s bakery - It goes beyond just government coddling of large firms, even if there were “equality”, large firms would still quickly acquire obscene power. “Free markets” are like a football game where the team that scores a touchdown or goal doesn’t just get points on the scoreboard - they also get to put an additional player (both offensive and defensive) on the field - which 90% of the time, will assure they score more points, adding more players, etc… so all the power quickly goes into one teams side.
Finally, the stuff about socialism doesn’t work because it takes away a person’s “drive to succeed”. But isn’t this self-centered “drive to succeed” a result of the capitalist milieu in which the individual is immersed? I see circular reasoning going on here. I reject the argument that selfishness - “we all desire to rule over a world of slaves” as one Chicago-school economist put it - is innately human. There have been cultures where the sharing of ones creative output is what is rewarded, and in such cultures one doesn’t see greed.
I myself never understood this, I’m a registered civil engineer, but never recall ever making a career decision based on monetary considerations beyond the pay being adequate to live on - it was the kind of work and the location of the work. I see few examples of truly great creative people being motivates by this either - Was Einstein out to get rich? Steven Hawking? Mozart? Jonas Salk? CD’s artist Natasha Myers?
Recall the Catholic Worker credo - “build a society where it is easy to be good”. (My right-wing Catholic brother thought this was the most evil thing he’s ever heard - but I digress).
Marx said: “From each, according to his abilities, to each, according to his needs”. I always think it hilarious that in a poll a while back, a majority of USAns said they thought Jesus said it.
It’s a question of whether the people are going to be free to pursue their better interests, which happen to include a healthy clean environment, and health, justice and prosperity for all people. This requires regulation, of course, which fundamentally conflicts with the capitalists’ idea of freedom and free markets. Today the capitalists realize they are fast losing the battle for hearts and minds. The people are fast learning that a truly free market means people are free to pursue their better interests without capitalist deception and manipulation. This threat to the capitalist status quo is why the capitalists are now frantically circling their wagons in Washington.
You may “never recall ever making a career decision based on monetary considerations beyond the pay being adequate to live on.” But that is hardly a basis for rejecting self-interest as an inate human motivation. In fact, it confirms it, your admirable self-restraint notwithstanding. An extreme example used as counter-argument merely suggests that some may be more or less highly motivated than others — some to the point of slave-owning compulsion, no doubt.
And that is really the point. Perhaps the world would be a nicer place if all members of humankind were generally and similarly inclined to place the common good above their own self-interest. But, IMO, that’s mere wishful thinking. The reality, as clearly demonstrated many times over by the ‘capitalism unconstrained’ experience, is quite different. And I, for one, have no expectation that relying on its inate human nature is likely to achieve any better results in the foreseeable future.
Anyone who wants to see how markets work should just play Monopoly. Everyone starts out even but through luck or guts or savvy soon one player dominates and does his or her darndest to eliminate all competition. This behavior can be seen in players from 8 to 80 years old. We can’t expect ‘businessmen’ to act any differently. We need to revoke the rights of corporate personhood and have revokeable corporate charters so that corporations serve the public interest as they were originally intended to do.
Greed and fear, the perfect motivators…not!
To paraphrase Rummy, you rule the world with the motivators you have, not the ones you wish you had.
Or, to be somewhat less sarcastic, you succeed, not by wishing otherwise, but by manipulating the socio-economic environment and/or its statutory underpinnings so that your desired results are seen as desirable by other in terms of their actual motivations as well.
“Global economic growth significantly increases with the growth of the world’s economic freedom,” said Ian Vásquez, director of Cato’s center for global liberty and prosperity.
My guess is that if one measured a country’s economic growth by its growth in median income (rather than GDP), they’d find that so-called “economic freedom” would be inversely correlated to growth. I wonder if that’s why we in the US measure growth only by Gross Domestic Product?
well if pure socialism “stifles the desire to succeed” that’s just what humanity needs because “success” only means contributing to global heating.
Here is a link discussing altruism in toddlers, you know, before we beat it out of them and make them greedy.
“Any parent can relate tales of a wobbly toddler’s endearing desire to help out. Now scientists have documented it, in a study suggesting that the capacity for altruism emerges as early as 18 months of age. ”
http://www.breitbart.com/article.php?id=D8G3K5Q01&show_article=1
http://www.msnbc.msn.com/id/11641621/
You adapt to the society you live in, if survival means every man for himself, you adopt that as your behavior, you have to live, after all… but if , on the other hand, you are encouraged to share and co-operate and punished for not doing so, that is how you will behave.
Maybe we need to not believe what we have been told about how greedy and self serving people ‘naturally’ are.
I get the feeling that many of the ueber-theoretical “free market” (oxymoron that it is) champions didn’t have children or extended families. Unless one is a complete sociopath, s/he is also “in it” for their spouse or partner, children, parents (if still living), extended family, and perhaps community. Nobody, unless s/he is sociopathic would want any of the aforementioned entities to suffer. Furthermore, there’s probably not a legitimate ethologist, anthropologist or sociologist alive today who’ll argue that most societies were otherwise: there is a dialectic between the needs of the selfish self and the needs of the outer/extended matrix.
In many/most traditional cultures there was an equivalent of the Northwestern Indian potlatch ceremonies — in which the wealthiest were expected to redistribute the most.
The “Free Market” has been a smoke screen for no regulations as far back as Adam Smith. It is a con from the right wing to let them do whatever they want in the name of profit. It will never provide all of societies needs and they know it. But that is not their intention.
“Every regulation reduces people’s freedom,” said David R. Henderson, a libertarian economist at Stanford University’s Hoover Institution. “The more regulation we get, the worse we do.”
Really, Mr. Henderson? Would you like to explain why the tax payers are once again bailing-out the banking system that went unregulated for decades, even after the Savings& Loan Scandal that took place in the 1980s under Bush I which cost the tax payers $600+/- Billion?
Whose freedom are you talking about, Mr. Henderson, and who is “we”? The majority of “we” don’t happen to be investors in the banking system that will once again walk away unscathed after perpetrating another scam upon unsuspecting tax payers.
Have Common Dreams readers been “Hooverized” yet?
@Bobbity — The inate nature of any species is not unidimensional and it matters not one whit what anyone chooses to believe or disbelieve about its fundamental motivational instincts. While obviously subject to various (societal) conditioning and control processes, self-interest is an essential survival ingredient without which we wouldn’t be here to argue the point.
Even the most honest businessman cannot understand evey unintended consequence of his “innocent greed”. Regulation is needed.
Its interesting that most of the airlines that pushed for deregulation are now history. Enron is mostly history. On and on.
One of the evils of the Bush administration is the arrogant non-enforcement of necessary regulation to benefit his patrons. The benefis were short-lived, benefited very few, and now we have to pick up the pieces.
As the global environmental emergency gets worse every year, we may find the free market is no longer relevant. We will be in survival mode.
Right, Arvy- I thought you understood me to say people’s behavior is the result of their conditioning.It can of course go either way, dependent on learned behaviors.
So, don’t condition them to greed and they are unlikely to be greedy. There is a common idea that people are absolutely certain to be self serving. If being self serving gets you ostracised and starved, you likely won’t live to do it. You won’t reproduce and so the more co operative beings flourish.
Yes there is an invisible hand — and it’s been picking our pockets.
If only it stopped at just picking our pockets. In fact, the societal impacts of the so-called “free market” go much deeper than that. Here’s a brief quote from one recent article on the subject entitled Now We Are Human Commodities:
Duh.
The invisible hand belongs to the people, not to the oligarchy. No professional politicians. Direct democracy NOW. See Senator Gravel’s National Initiative for Democracy.
The invisible hand of the market is the result of individual decisions. Many of these decisions are really made by only a few, and we at the bottom have merely the illusion of choice.
It’s an invisible hand job.
socialism need not not mean some idealistic end of antagonism or dominance of altruistic values.It means the return of true democracy, expressed through meaningful political discourse, so natural anatagonism can be worked through without the coercion and violence which truly run the capitalist system.Socialists are just fighting for equal representation, not some perfect workers state.
Under capitalism, man exploits man. Under socialism, it’s the other way around.
I’m less interested in abstract “-isms”, and more interested in a measurable decentralization of wealth & power.
If the bottom 90% controlled 90%, probably free markets, entrepreneurship, creative energies, the arts, etc. would be rejuvenated.
Far, far, too much of our real estate, wealth, banking, power, etc. is tied up in a very small number of players — perfectly willing to sell these debts to foreign countries (who undoubtedly lobby them heavily), etc. The present system is probably such a mess that you can’t even throw an “-ism” at it and have it stick.
My…so much careful-analysis.
Hey, ever play Monopoly? If so, how did it end-up at game’s-end?
There is no such thing as a “free” market.
They haven’t changed their mind at all on their position regarding the sanctity of the free market. It is just that now they want to bail out the bankers and thus argue for regulatory intervention. it is the same old story about how people rave about the free market and against regulation- then when it tanks from greed, in come the government and the same people to bail themselves out.
And people fall for it ever time- over and over.
One point missing. The 19th century Supreme Court decisions that gave corporations status as persons regarding constitutional rights. Now Nebraska had their “no farm land ownership by corporations” law overturned.
We need this “precedent” overturned either by the Supremes or by constitutional amendment. (even Robert Bork alluded to the need to do this)
Then you can make separate regulatory systems for corporate entities whose managers, by law, are exempt from personal financial liability. Originally, this was thought to be a good thing to promote economic activity. Now it stifles it.
Damn straight, luna. There never has been a “free” market that wasn’t underwritten by the state, or more accurately, handfuls of armed mariners in the mercantile days of pre-capital. Capital will insist this wasn’t a state, but given that it asserted its own central and sometimes even “godsent” authority and right to institute a “free” market”, I don’t know what else you’d call it. But, given that these people believe that people made machinations- or “invisible hands” can guide the well being of real people, why, I guess they just make it up as they go along.
And what about “incentive”? How else will we get people to produce, ask capitalist geniuses? But anyone can see that the threat of starvation and loss has a minimal role to play in the advance of humanity. Market “discipline” carried to extremes, as it is in our day, is producing a tendency to walk into public places with explosives strapped to oneself. That’s overseas. Here at home, people with pistols just decide to go out shooting at whomever. Ah, yes, very productive indeed. Social darwinist chaos as a solution to the restrictions on personal expression and autonomy introduced by the market, and it’s good friend the church.
The future is with a democratic plan launched by the working class majority and supported by it’s allies within the entrepreneurial set who can see the writing on the wall. Everybody else will be eating each other’s children.
LUNA at 12:01 pm, you clarify that “There is no such thing as a free market.”
Yes. “There Aint No Such Thing As A Free Lunch (TANSTAAFL)) either - Thanks to Robert Heinlein.
I think that we can profitably rephrase that as:
Namaste … … … … … … … … … … … … … … … … … Mahatma Gandhi … … … … … … … … … …
« We must be the change we wish to see in the world »
« There is a sufficiency in the world for man’s need but not for man’s greed »
There is no such thing as a free market, or capitalism, or socialism in the classically defined sense. The economies and governments in all countries and most regional and local governments are basically mafia’s. It’s all who you know, who you owe, and what sort of clout (via money, violence, or organization) you have to achieve what you want. Want to understand the world? Forget what you learned in civics, watch the Sopranos.
“As the global environmental emergency gets worse every year, we may find the free market is no longer relevant. We will be in survival mode.”
This is well put yet the Hubbert Peak Oil may well bring it about sooner then global warming or desertification does…how soft the landing is from going down this cheap energy slope will be dictated by how long the current economic policy continues detached from a science-based understanding of sustainable systems. The current free market, with absolutely no regard to the fallacy that unchecked exponential growth cannot continue in a closed system forever; a good way to characterize the larger ecology we live within. Or to think simpler, consider bacteria in a petri dish of finite size. Works great when there’s a lot agar and a very few outpost colonies, very foolish once it becomes clear the dish is finite and it already within an order of magnitude (or past already!) its holding capacity.
It’s almost crazy that the energy industry is pushing nuclear power all of a sudden, not for technological reasons at all, I am guessing that Big Energy is all too aware that many alternative sources (wind, solar, scrap weed biomass, micro-hydro, …) are inherently scalable technologies (indeed are best deployed in a diffuse, spread-out fashion), which implies decentralization, which leads to loss of perpetual control, and democratization of energy generation. Hence the pushing of fossil fuel replacement energies that are inherently capital- and infrastructure-intensive, like corn ethanol and nuclear. This, despite these being inferior on technical grounds (arguably) to the more pure alternatives.
There is price fixing and there may just be supply fixing. Enron showed that you could game the system by creating artificial shortages. OPEC learned long ago to restrict supply. This may also include a restriction of capital supply for alternative energy programs.