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Published on Monday, January 23, 2012 by Common Dreams

Conservative Fantasies About the Miracles of the Market

by Robert Jensen

A central doctrine of evangelicals for the “free market” is its capacity for innovation: New ideas, new technologies, new gadgets -- all flow not from governments but from individuals and businesses allowed to flourish in the market, we are told.

That’s the claim made in a recent op/ed in our local paper by policy analyst Josiah Neeley of the Texas Public Policy Foundation, a conservative think-tank in Austin. His conclusion: “Throughout history, technological advances have been driven by private investment, not by government fiat. There is no reason to expect that to change anytime soon.” http://www.statesman.com/opinion/cheap-energy-comes-when-market-rules-2105711.html

As is often the case in faith-based systems, reconciling doctrine to the facts of history can be tricky. When I read Neeley’s piece, I immediately thought of the long list of modern technological innovations that came directly from government-directed and -financed projects, most notably containerization, satellites, computers, and the Internet. The initial research-and-development for all these projects so central to the modern economy came from the government, often through the military, long before they were commercially viable. It’s true that individuals and businesses often used those innovations to create products and services for the market, but without the foundational research funded by government, none of those products and services could exist.

So I called Neeley and asked what innovations he had in mind when he wrote his piece. In an email response he cited Thomas Edison and the Wright brothers. Fair enough -- they were independent entrepreneurs, working in the late 19th and early 20th century. But their work came decades after the U.S. Army had provided the primary funding to make interchangeable parts possible, a transformative moment in the history of industrialization. In the “good old days,” government also got involved.

As Naomi Oreskes and Eric Conway explain in their book Merchants of Doubt, the U.S. Army’s Ordinance Department wanted interchangeable parts to make guns that could be repaired easily on or near battlefields, which required machine-tooled parts. That research took nearly 50 years, much longer than any individual or corporation would support. The authors make the important point clearly: “Markets spread the technology of machine tools throughout the world, but markets did not create it. Centralized government, in the form of the U.S. Army, was the inventor of the modern machine age.”

That strikes me as an important part of the story of the era of Edison and the Wrights, but one conveniently ignored by free-marketeers.

Even more curious in Neeley’s response were the two specific products he mentioned in his email: “The plow wasn’t created by government fiat, and neither was the iPhone.”

The plow and the iPhone are the best examples of innovations in the private sphere? The plow was invented thousands of years ago, in a world in which governments and economic systems were organized in just slightly different ways, making it an odd example for this discussion of modern capitalism and the nation-state. And the iPhone wouldn’t exist without all that government R&D that created computers and the Internet.  

Neeley didn’t try to deny the undeniable role of government and military funding; for example, he mentioned the Saturn V rocket (a case made even more interesting, of course, because Nazi scientists were brought into the United States after World War II to work on the project). “But the driver of these advances’ adoption and relevance outside the realm of government fiat has always been the private sphere,” he wrote in his response.

Neeley is playing a painfully transparent game here. He acknowledges that many basic technological advances are driven by government fiat in the basic R&D phase, but somehow that phase doesn’t matter. What matters is the “adoption and relevance” phase. It’s apparently not relevant that without the basic R&D in these cases there would have been nothing to adopt and make relevant for the market.

We’re in real Wizard of Oz territory here -- pay no attention to the scientists working behind the curtain, who are being paid with your tax dollars. Just step up to the counter and pay the corporate wizards for their products and services, without asking about the tax-funded research on which they rely.

There are serious questions to be debated about how public money should be spent on which kinds of R&D, especially when so much of that money comes through the U.S. military, whose budget many of us think is bloated. More transparency is needed in that process.

But anyone who cares about honest argumentation should be offended on principled grounds by Neeley’s sleight of hand. His distortion of history is especially egregious given the context of his op/ed, which argues against public support for solar energy in favor of the expansion of oil and gas drilling. Neeley focuses on the failure of Solyndra -- the solar panel manufacturer that filed for bankruptcy after getting a $535 million federal loan guarantee -- in trying to make a case against government support for alternative energy development. When public subsidies fail, there should be a vigorous investigation. But the failure of one company, hitched to a highly distorted story about the history of technological innovation, doesn’t make for a strong argument against any public support for solutions to the energy crisis, nor does it cover up the fact that the increasing use of fossil fuels accelerates climate change/disruption.

The larger context for this assertion of market fundamentalism is the ongoing political project to de-legitimize any collective action by ordinary people through government. Given the degree to which corporations and the wealthy dominate contemporary government, from the local to the national level, it’s not clear why elites are so flustered; they are the ones who benefit most from government spending. But politicians and pundits who serve those elites keep hammering away on a simple theme -- business good, government bad -- hoping to make sure that the formal mechanisms of democracy won’t be used to question the concentration of wealth and power.

Throughout history, the political projects of the wealthy have been driven by propaganda. There is no reason to expect that to change anytime soon, which means popular movements for economic justice and ecological sustainability not only have to struggle to change the future but also to tell the truth about the past.

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