What amazes me is how a vague and intellectually bankrupt (because it is so nebulous as to be used in ways that often wind up being contradictory) term like “free markets” nevertheless gets accorded respect it does not deserve in popular discourse in the US, particularly in the media.
Well it turns out that the public is not so easily swayed. A BBC survey of 29.000 people in 27 countries found that significant majorities, even in the US, thought more regulation and reform was needed to rein in capitalism gone amok. Only 11% said it was fine as is. By contrast, 23% of the total deemed it to be “fatally flawed”:
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Maybe so, but the U.S. is still the most credulous in the world, by my eyeballs, while Germany shows its perennial character towards moderation. Always amused and amazed me how different things get as soon as you cross into France. I’m curious how much this has changed over time.
The country where I would be thrilled to see the results is China. China is the most free-wheeling, capitalistic country I’ve ever been to, and I wonder if they like it that way. Any links to the full survey results to see if that’s included?
I’ll predict that, over the next five years, free marketeers will find a way to turn the public’s wrathful anger over the financial system and oligarchy into support for “free market capialism”. There’s always a productive use for a mob, and if you do it this way, it’s a positive feedback loop. What could be better?
While I am not surprised that France comes out top, I am quite surprised to see that Germany comes out bottom. Although I suspect that Germans in general adhere more to the notion of a market economy than the French, the Germans however always seem to emphasise that they support a “social” market economy, as opposed to a “free” market economy.
Perhaps there is something in which the questions to the target audiences were phrased in the different languages.
German attitudes are slowly but surely changing; while in general they are still quite concerned about ‘Sozialgerechtigkeit’, taxes are quite here, and people are now also looking for relief from that. The FDP, as close to a libertarian party as Germany could ever come, had a very good result in the last election, so good that the conservatives (CDU) could form a coalition with them, rather than continue with the ‘great coalition’ with the main left party (SPD).
It is not surprising to me that France finishes on top.
Actually where does free market capitalism exist so that people get a feeling how it works? Not to say I’m an advocate of it but especially the US is as far away from free markets as can be, given the numerous interventions of the government. I would call it a financial oligarchy but not a free market system.
But, lest you get me wrong: As far as I know some free market capitalism was prevailing during the time of industrialisation and then it showed its cruelty towards the mass of people who were working in the factories and the mines.
The reason I oppose the use of the term “free markets” is that the benefits ascribed to markets, generally speaking, hold only when no buyer or seller has much (any) power, meaning they are small, buyers and sellers have equal acces to information, and goods are more or less commodities (having a specialized product that people want or need gives the seller power). That setting is horridly unattractive to businesses. So the real world of commerce bears very little to the idealized world of economists in which markets produce wonderful outcomes.
Then we have the libertarian version of “free markets” where no rules apply. That quickly produces outcome like the ones you describe: the powerful exploit the weak. You get abuse of workers, shoddy, even dangerous products (think of toxic toys and toothpaste out of China, or the adulterated meat out of the old Chicago slaugherhouses per The Jungle).
The use by moderates of the first view of markets is too often in the US taken as an endorsement of the latter construct.
You are 100% correct. So you get this notion of “soziale Marktwirtschaft” where the government intervenes to preserve some resemblance of true competition and a basic social equilibrium. Which is probably why the germans are rather fond of that model. Our experience with that kind of system during the last couple of decades was quite positive.
But had the US government followed your advice to at least nationalise failed banks, the forces of a market would have remained rudimentary in place and I think for the better. I see a fundamental ideological change has taken place in the US government that it has somewhat given up the market economy.
pigeon,
You say that “I see a fundamental ideological change has taken place in the US government.”
I think that’s a false reading of the situation. There has been “a fundamental ideological change,” or more likely a reassertion of values and beliefs that were always there, but hidden away. But this change has been on the part of the public, not “the US government.”
The US government seems to no longer represent the wishes and values of the people. Poll after poll shows a majority of Americans want healthcare reform with a robust public option, it wants healthcare reform paid for by additional taxes on the rich, it wants the US out of Iraq and Afghanistan, it wants the government to invest in jobs because “we cannot solve the deficit problem without getting people back to work and getting our economy growing again,” and by more than a 3-to-1 margin believes investing in “job creation, education, and energy independence” is more important than “cutting government spending and reducing the deficit.” http://epi.3cdn.net/4fc2e76fd3593d283f_qtm6bx19l.pdf
And yet the US government is hell bent upon pandering to the whims of handful of teabaggers, who work hand-in-glove with powerful economic, political and media elites to create the fiction that greed and selfishness is the dominant ethic in America.
Couldn’t have said it better. You’re right on.
the benefits ascribed to markets, generally speaking, hold only when no buyer or seller has much (any) power, meaning they are small, buyers and sellers have equal acces to information, and goods are more or less commodities (having a specialized product that people want or need gives the seller power). That setting is horridly unattractive to businesses.
So larger businesses therefore welcome regulation, which keeps their smaller competitors smaller.
You need to provide examples of regulation that has enabled competition rather than restricted it if you want your assertion to have any basis in fact rather than mere religious babble. Anti-trust regulation may be the only area where competition is enabled, but that is a small portion of regulation. The idea that regulation is such a great thing because it stifles monopolies holds little water because it more often that not merely creates oligopolies, which is some ways are more dangerous than monopolies.
I think the real point is that the term “free market” is mostly useless for analysis – what does matter are the specific markets and the rules imposed upon them. If one cannot approximate (through anti-trust) something like (and acceptable to people) the model of many-sellers many-buyers, price-taking symmetrically situated parties, facing no or little barriers to entry or exit, then a regulated monopoly is probably the best one can get. If the regulations are written to benefit the monopolizers to the detriment of the consumers, one gets the “Libertarian” kind of “free market” where being big is no sin, even if there’s no more symmetry between parties, barriers to entry are prohibitive, and people either pay the price exacted or do without.
An example illustrating the vacuousness of “free market” is its occurrence in “net neutrality” arguments. People like me want a “free market” wherein ISPs compete for our purchase by their reliability and monthly charges, and there’s no ISP controlling of (otherwise legal) content. People like John McCain want a “free market” wherein content providers compete with one another for access to ISP’s (and so, the customers of those ISPs) – because, after all, don’t free people (ISPs and say, oh, Fox) have the right to make contracts even if it means that some people will have a harder time reading Naked Capitalism?
We know what the solution is supposed to be in the John McCain “free market” – Yves Smith has to pony up to ISPs if she wants to be seen, or some other ISP is going to have to enter DR’s market, offering its array of programing. (This tends to sound rather like a crappy model we already know, cable/satellite TV, a case of monopolies writing rules that benefit themselves over consumers …) Whether another ISP can do so is an empirical question. There certainly are many of them now – but whether dodging the obstacles that freely made contracts would impose upon consumers is a political-economic question as to whom one gives the most freedom in the market.
A whole swathe of consumer protection regulation enhances competition, from SEC regs that keep trading markets fair (no front running by dealers, no insider trading), truth in advertising laws, disclosure (both SEC and consumer products like food, drugs, and dietary supplements). They reduce information asymmetry problems.
Yves – a few disagreements on syntax.
How do you define the “benefits” of any political economy? What is the value that you believe an economy must be beneficial in achieving? Keeping people fed? Happy? Does freedom matter? How do you quantify these abstractions? Isn’t there some legitimacy to the argument that people should be free precisely because we have no common goal?
If you’re going to distinguish between products people want and products they need, can you provide a way to tell one from the other? What precisely are the needs of a human being? Can you provide a list that holds for every one of us?
If my possession of an object that you want qualifies as power, then what exactly is your working definition of freedom? Superior force? The ability of theft?
Is access to information ever equal? Wouldn’t this depend A) on your definition of what constitutes information, and B) on your personal ability to understand and appreciate that information? How do you establish that a party is ignorant, and that therefore they should not be allowed to satisfy their desires in the marketplace?
Are you alleging that “powerful” Chinese producers are exploiting “weak” American consumers? If you believe that catering to the demands of consumers is exploitation, then how can a free market be anything but exploitive, by your own definition?
I know you weren’t making a thorough case for your views, but I would still point out that arguments beginning with circularities and assumptions generally come full circle. If you believe people will, in a free state, be ignorant and exploited – and this is no more than a belief, as it cannot possibly be proven – then your conclusion on free markets will be such as it is. But where does this leave you? How do you expect free voters to be any different? Doesn’t political economy become, for you, just a question of who exploits who?
Free markets is an intellectually bankrupt concept. How would you buy a computer in a society with no rules on commerce? You as a buyer cannot assess at the time of purchase whether the computer really has the functionality specified (memory, chip speed, etc.) So you need to hire an expert to make sure the computer has the promised functionality and bring him with you when you intend to make the purchase. You will also need to pay cash.
But how do you know your exert is any good? You cannot assess your expert. And your expert may be getting a kickback from the seller to recommend a deficient computer. And if you tried claiming in court that you had been cheated (say you determined it had happened) how much does it cost you to find a new expert and evaluate the computer again, then go to court and try to get your money back? And if the other side does show up, it will of course product its own witness saying the computer was fine.
The usual recourse of the “free markets” extremists is to rely on courts, but that is far too costly a remedy (in hard dollar and time terms) for comparatively small purchases. Anonymous, arm’s length commerce becomes very costly on a transactional basis without enforcement mechanisms beyond contract law.
You say that “free market” implies a complete lack of rules. I agree that this would be an utterly bankrupt and useless concept. Which is why I see no need to use it. Bear with me, I’m going to be longwinded so that I can be clear.
Let’s say instead that a free market is an environment where all rules are voluntary, save those against physical violence. This would put business dealings in the same context as conversations, arguments and personal relationships. People engage in these activities every day with the only stipulation being that they do not commit violence. Yet their personal well-being is very much at stake, perhaps even more so than in a trip to the cleaners or the grocery or almost any monetary transaction they’ll make. The reality is that further rules are necessary for these activities to be safe and beneficial to the participants, that these rules are voluntary, and **that they are agreed to for the mutual benefit they will bring to the people involved**. Rules such as, use grammar, make sense, be interested, be honest, etc. They are frequently broken, but not without real consequences, such as being ostracized or celibate (and I don’t mean vocationally). All voluntary, but the system manages a kind of enforcement that neither you nor I could implement so well, or so fairly, with regulation.
Same with markets. They cannot exist without rules, but they will supply these rules because they are mutually beneficial. Those who violate the trust of the transaction may gain today – and a liar may work his way to someone’s bed – but this is paid for later. And regulators in the bedroom would not replace the need for good judgment and intelligent decision making; they would simply place the matter into indifferent hands. Bad, dishonest things WILL happen – we cannot stop them – but you cannot introduce regulation without making voluntary agreements less voluntary, and without making society less a mutual arrangement than it is an enforced power struggle.
What can I say to your example except, this is utterly routine and any member of any human society anywhere in the world will give you the same answer. You find people or companies you trust and you stick with them, until they give you reason not to trust them. If you are judicious you will rarely be inconvenienced. If you’re not judicious… then be more judicious. Transaction costs of this type diminish as a markets (and people) mature and certain names become trusted. There’s no other alternative and there’s no getting around human nature, and involving the government only ensures that you have an ignorant, unwary populace, ripe for getting screwed by special interests. Is this not precisely what we have? Have not government guarantees and assurances been at the center of every speculative bubble of recent memory? Are not mandated, cartelized industries such as finance the epicenter of our culture of gluttony and deception?
Or is this not what we’re talking about? Is the real problem somewhere else, like the the fact that you have to pay a whopping $300 for that computer with several billion transistors, which will last you at least as long as that POS Government Motors sedan you payed $30,000 for (because the import duties on Toyotas were so steep)?
The guilds argued precisely what you’re arguing. Free trade would screw consumers. They were wrong. Domestic manufacturers argued that free trade would screw consumers. Show me the angry masses of consumers of vastly cheaper Chinese products — which though inferior, have been getting better, not because of regulation but because of increasing product awareness and wallet discretion on this side of the Pacific. Entrenched businesses are REGULATORY in nature.
Again, if you believe people screwing each other over is the rule rather than the exception, then there is no cure for this and the world is a very shitty place. If you believe people are conditioned into their actions, then the only solution is allowing society to address these antisocial tendencies, rather than deferring that responsibility to a perennially corrupt and antisocial government.
“Does freedom matter? …. Isn’t there some legitimacy to the argument that people should be free precisely because we have no common goal? ….Doesn’t political economy become, for you, just a question of who exploits who?”
Hunger is much less abstract than freedom – and where the former is more straightforwardly answered (When did you last eat, and what?) the latter requires more detail – things become a matter of who’s free to do what, and political economy cannot ignore the immediacy of who’s doing what to whom. One’s reason can at most demand the greatest degree of freedom consonant with a like degree of freedom for all (Rawls’ formulation uses “liberty”); as my absolute freedom would be my tyranny over the rest – your freedom as a Hobson’s choice.
http://www.chron.com/apps/comics/showComic.mpl?date=2009/10/21&name=Non_Sequitur_pan
Hunger is simply not the issue, nor is it less of an abstraction than freedom. First of all because, in the West, it is no longer an economical problem but one of individual cases and particular circumstances. Secondly, food is not universally needed. People who are full do not need to eat. People who are fasting may feel hunger but do not need to eat. People who would prefer to die – don’t laugh – do not need to eat. Furthermore, even if we could establish a persistent need for hunger, what does this devolve into? A need for beef, or a need for chicken? Fruit, or vegetables? If we’re going to do away with abstractions, then please tell me what it is EXACTLY that people need. Flower, or corn? And how do you measure this need? What good does it do for you to tell me that there is a need, when you cannot quantify or qualify it, or even prove that it exists?
As far as where freedom ends – yes. I agree with you completely. Therefore I don’t see how private property exerts any “power” over covetous individuals.
In his review of Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement, David Leonhardt chides author Brian Doherty for failing “to ask why people who claim to love freedom have so often had a soft spot for those who would deny it to others.” Leonhardt points out that Doherty skates over “questionable matters”:
for instance, that Friedman advised the murderous Pinochet regime in Chile; that Merwin Hart “infected his free-market thought with anti-Semitism”; and that Rothbard supported Strom Thurmond’s segregationist campaign for president in 1948 (because, Doherty casually observes, “he admired Thurmond’s states’ rights position”).
http://www.nytimes.com/2007/04/01/books/review/leonhardt.t.html
But one of libertarianism’s two divinities–Ludwig von Mises and F. A. Hayek—was also quite a fan of Pinochet’s:
Friedrich von Hayek, the Austrian émigré and University of Chicago professor whose 1944 Road to Serfdom dared to suggest that state planning would produce not ‘freedom and prosperity’ but ‘bondage and misery,’ visited Pinochet’s Chile a number of times. He was so impressed that he held a meeting of his famed Société Mont Pélérin there. He even recommended Chile to Thatcher as a model to complete her free-market revolution. The Prime Minister, at the nadir of Chile’s 1982 financial collapse, agreed that Chile represented a ‘remarkable success’ but believed that Britain’s ‘democratic institutions and the need for a high degree of consent’ make ‘some of the measures’ taken by Pinochet ‘quite unacceptable.’
Like Friedman, Hayek glimpsed in Pinochet the avatar of true freedom, who would rule as a dictator only for a ‘transitional period,’ only as long as needed to reverse decades of state regulation. ‘My personal preference,’ he told a Chilean interviewer, ‘leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism.’ In a letter to the London Times he defended the junta, reporting that he had ‘not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende.’ Of course, the thousands executed and tens of thousands tortured by Pinochet’s regime weren’t talking.
http://www.counterpunch.org/grandin11172006.html
Carlos Fuentes sheds a little more light on the governing practices Friedman and Hayek championed:
In a savage action, Allende partisans were rounded up, gathered in a stadium, and murdered en masse. Others were sent to concentration camps, and still others were exiled and sometimes murdered abroad. Pinochet did all of this in the name of democracy and anticommunism. It is a measure of Chile’s strong democratic traditions that it survived this brutal dictatorship and found its way back to democracy in 1990.
–Carlos Fuentes, “The Buried Mirror”
Indeed political economic is just a question of who exploits whom as Karl Marx docet. The existence of ignorance and exploitation which translate into information asymmetries, to use modern terminology, is why we cannot and should not have free markets. Inequality is the real problem. There is no voluntary rule that can correct it. If a rule could be voluntary we would not need rules at all.
Most French people, including at the left side of the political spectrum, do accept some kind of ‘économie sociale à l’allemande’ (Soziale Marktwirtschaft). I would not challenge that most of the households are significant net savers…
Not exactly bankers living on the monetary beast – except for a couple of la-défense “investment bankers” (sic). Thus they are not exactly pleased with the current state of the financial-and-monetary system.
In the end, this so-genannte survey is at best a linguistic and political manipulation that tells more about the survey-or that the population surveyed.
PS: what is a “free market” by the way?
Ha, survey with-in a survey!
Skippy…same light bulb went off in my mind, with regards to France, Germany and the structure of the survey lol.
How you ask the question determines the nature of the answer. That aside, there is the economist’s dictionary use of the term free market and then there is common usage. By and large the average person, when/if they even think about it, generally thinks of the “free market” as meaning choice, lots of choices.
As other “isms” take over or crowd in, the sense of choice diminishes or contracts markedly as the economy usually shrinks. We are about to find that out in health care.
On a side note there are very few libertarians who ascribe to free markets– no rules at all. Again it’s a common usage thing. What they most want is a set of fixed rules and then the government to f’k off. It is this violation that leads to the grand debate. Did the supposedly free market lead to the current debacle or was it continued governmental interference that created the witch’s brew. Every economist, usually depending on their political persuasion then chimes in. The average voter sides with the government because it makes emotional sense that business is evil when times are bad hence certain poll results.
What in fact appears to be happening since Adam Smith’s time is a series of booms and busts. Each leading, with warts and all, to better living conditions. Sadly however there are some economists/government officials who wrongly believe they can control this cycle. Can’t be done, it’s like stopping the tides. Currently we are watching this tragedy play out again with trillions, never to be paid back, being used once again to distort the markets for their monopolistic friends. Some might even call it crony capitalism.
The good news, we will survive as we have all the prior busts. However the debate will continue, unless of course we end up like Argentina. Don’t laugh it is a very real possibility.
Your abiding faith in the capitalist ideology which Adam Smith gave birth to has many historical parallels.
That powerful, unempirical belief systems like capitalism or Christianity can “work” regardless of their untruthfulness is a known fact. Smith’s “invisible hand” a.k.a “rational choice theory” has about as much basis in factual reality as the Garden of Eden.
Spain provides a prime example of how counterfactual idologies can work. Its ascent was due to an economic model dependent on conquest and plunder in combination with a strong faith in Christianity, which lent the economic model purpose and meaning.
But in the 17th century Spain fell from preeminence and many of the true believers couldn’t figure out why, as set out here by J.H. Elliott:
Seventeen-century Castile had become the victim of its own history, desperately attempting to re-enact the imperial glories of an earlier age in the belief that this was the sole means of exorcising from the body politic the undoubted ills of the present. That it should have reacted in this way was not inevitable, but it was made the more probable by the very magnitude of the country’s triumphs in the preceding era. It was hard to turn one’s back on a past studded with so many successes, and it became all the harder when those successes were identified with everything that was most quintessentially Castilian. For had not the success derived from the military valour of the Castilians and their unwavering devotion to the Church?
–J.H. Elliott, Imperial Spain: 1469-1716
A more recent and perhaps more apropos parallel can be found in the rise and fall of Great Britain, as explained here by Aaron L. Friedberg:
What reasons did contemporary British observers give for their superior material success? The nation’s citizens may well have thought of themselves as more vigorous, more inventive, more in harmony with the wishes of the Almighty, than any of their competitors. But judging by the outcome of some of the more important public debates of the period, most of them also believed that their good fortune resulted in the first instance from wise policy, in particular from the triumph of laissez-faire notions of political economy.
Following the publication of Adam Smith’s treatise, “An Inquiry into the Nature and Causes of the Wealth of Nations,” in 1776, the idea that minimal government interference in trade and production meant maximum wealth and well-being gained ground at a rapid pace. Smith’s theories regarding the benefits of free trade were embellished by scholars like David Ricardo, and they entered the popular vocabulary through the speeches and pamphlets of Richard Cobden and John Bright. But the middle of the century, after a series of intense struggles that tended both to demonstrate and to increase the political power of the new middle classes, most existing government constraints on commerce and in particular, on overseas trade had been removed. What had begun as “a purely utilitarian and piecemeal involvement thriving on the mild modification of import duties,” had become “a doctrinaire force making for complete freedom of trade, backed by a whole philosophy of commercial liberalism and anew popular faith in the virtues of free competitive enterprise.”
–Aaron L. Friedberg, The Weary Titan: Britain and the Experience of Relative Decline 1895-1905
As Friedberg goes on to explain, Great Britain, like Spain, also became a victim of its own history. The “ardent defenders of the financial faith” could never grasp the fact that the “dominant financial orthodoxy” that had served the nation so well in its rise to preeminence was helpless to arrest its decline. The world had changed, but the economic religion had not. The true believers clung to the old faith, in defiance of all countervailing evidence, and rode it to near oblivion in WWII.
It’s the The Fable of The Bees: or, Private Vices, Public Benefits
http://mgiannini.blogspot.com/2009/10/fable-of-bees-or-private-vices-publick.html
“That powerful, unempirical belief systems like capitalism or Christianity can “work” regardless of their untruthfulness is a known fact. Smith’s “invisible hand” a.k.a “rational choice theory” has about as much basis in factual reality as the Garden of Eden.”
Too funny!
Would you care to explain the difference between a “counterfactual ideology” and an ideology that you personally disagree with? Is there some higher arbiter than yourself that you’re appealing to? What system of belief doesn’t argue that the facts line up in its favor?
That Spain and England “fell” according to a historical analysis centered on their economic and military dominance, proves nothing at all about the validity of their economic models or cultural values. This is simply speculation and judgment based upon your own peculiar values, and if nobody argues with you it’s because, hundreds of years after the fact, nobody cares and the issue isn’t relevant.
Similarly, that an animal goes extinct does not prove that God didn’t love it, or that it was an inferior creature. It proves only that, given an absolutely identical series of events, the animal would go extinct again.
Finally, though you may harp on ideologies, your assertion of a hierarchy of truth, a “factual reality”, the supremacy of empiricism all mark you as an ideologue. You cannot prove these things exist, you can only argue that believing in them has some practical value – and then you have to define “practical”. We cannot argue or even interact with each other without making certain assumptions, so therefore we are all ideologues. Which is why none of us is qualified to tell another person how to live, what to think, or what to buy. The actions of individuals (singularly or in markets) cannot be judged by anyone but themselves, because we NECESSARILY apply our own value judgments in preference to theirs. People should be free.
You are advocating an extreme form of postmodernism that treats science as equivalent to any other belief system without any special claim on what counts as knowledge.
For a thorough rebuttal of this type of “thinking,” I recommend the book Fear of Knowledge: Against Relativism and Constructivism by philosopher Paul Boghossian.
And as to your request that I “explain the difference between a ‘counterfactual ideology’ and an ideology that you personally disagree with,” there’s really no need for me to do so. People much smarter and better versed in these intricacies of junk science have already done so:
The collapse of our economy for lack of regulation was preceded by the collapse of rational choice theory. It became clear that the single minimalistic principle of self-interest could not explain the length and breadth of human behavior. Economists started to conduct experiments to discover the actual preferences that drive human behavior. The field of experimental economics was born and two of its founders (Vernon Smith and Daniel Kahneman) were awarded the Nobel Prize in 2002.
Actual human preferences are all about regulation. A microcosm of America’s economic collapse can be created in the laboratory in a single afternoon. Yank a group of people off the street, give them a task that requires cooperation, and most of them will play along as solid citizens. Unfortunately, a few will game the system if there is any way to cheat. Once the solid citizens realize that they’re being ripped off, they withdraw their cooperation as their only defense. Provide them with an opportunity to punish the cheaters, and some (but not all) punish with zeal. Even the cheaters punish other cheaters with zeal! Once the capacity for regulation is provided in the form of rewards and punishments that can be implemented at low cost, cooperation rises to high levels. Regulation is required or cooperation will disappear, like water draining from a bathtub.
http://www.huffingtonpost.com/david-sloan-wilson/the-invisible-hand-is-dea_b_128030.html
Hmm. How does one even respond to such a smug reply? Am I supposed to now debate philosophy with you and ignore the fact that you replied to not a single one of my points, when each was made in good faith and without an appeal to either “greater minds” or dismissive labels?
For your clarification, empiricism is a code of belief, but science is a process. That fact that it exists, and it produces tangible results, does not give you the ability to spout conjecture and call it “science”. Let me put the matter simply. There is no way for the scientific method to reveal to you A) what I want, B) a means for measuring the validity of this want, or C) the efficacy or logic of my actions given that you DO NOT KNOW what I want. You can only judge my actions in reference to YOUR desires, which becomes a logical absurdity, unless you also argue that I should want what you want, and that there is some need for us all to want the same thing. This is called ideology. Can I possibly be any clearer as to why you and everyone else who wishes to say what people “should” do and how society “should” be are ideologues? And why controlled economies are inherently ideological?
I would think that someone who leans so heavily upon the crutch of other peoples’ thinking – and particularly upon such absurd claims as “A microcosm of America’s economic collapse can be created in the laboratory in a single afternoon” – would understand the value of differing perspectives and a healthy freedom in allowing individuals to follow their own aims. That you consider yourself the champion of a Western system of thought that is itself the result of “cheaters” and innovative outliers and revolution, and then quote me an article in defense of forced “cooperation”, is really very wonderful, and leaves me with no doubt that I’m dealing with a true “man of science”.
Costard,
Your sneering tone is out of line. Your entire last paragraph to DownSouth is a well dressed up ad hominem attack. That’s a violation of the comments policy here.
People should be free, if they can and are allowed. If you keep them ignorant and exploit them, how can they be free? You are free if you have a good job, you are well educated and you have money to pay for “information”. To eradicate exploitation and ignorance, government rules (social norms) may help.
Social norms versus market norms at
http://mgiannini.blogspot.com/2009/03/social-norms-versus-market-norms-how-to.html
Most of the libertarian stuff I have read is against the Federal Reserve and to some extent fractional reserve banking. The need for regulation would decline significantly if legalized fraud was no longer permitted.
Bankers, oligarchs and corrupted government officials will always give capitalism a bad name
It’s interesting in this light that the French rank highest in productivity per worker hour. Pretty counter-stereotypical, I think.
In addition to the incisive poll on Free Market Capitalism, I can’t wait for the BBC poll on the following:
State Capitalism:
1. Is fatally flawed and a different economic system is needed.
2. Has problems that can be addressed by loosening government restrictions and regulations.
3. Works well and increased market-based freedoms will make it less efficient.
Gosh, I wonder how such a poll would turn out. Which of the following would be the more likely statement from these respondents:
A. “State Capitalism ROCKS! We want MORE government”
vs.
B. “Sure, State Capitalism has problems…but many of these problems can be addressed by loosening government restrictions.”
Of course, most people are going to choose the moderate response. Add to these moderates those who hate State Capitalism…and voila! You have a “significant majority” that wants more Free Market Capitalism.
Of course, you’ll respond with the fact that in the real BBC poll, “Only 11% said it was fine as is. By contrast, 23% of the total deemed it to be “fatally flawed”
But the mere fact that people are being asked about something (ie free market capitalism or state capitalism) means that somebody thinks there’s a problem…or there wouldn’t be a poll.
If the poll was:
Going to the movies during daylight hours:
1. Is fatally flawed and should be avoided.
2. Is acceptable, but only in moderation.
3. Is beneficial and should be pursued.
The results would come in with a tendency towards moderation and you’d get your bias from the extremes. If the poll was conducted at a time when there was a heated societal debate on healthcare and obesity, you might just get a heavier distribution towards the notion that going to the movies during the day is a problem in need of regulation.
So what?
This is a stupid poll signifying nothing.
Soon will be the anniversary of famous Bush’s statement:
“I’ve abandoned free-market principles to save the free-market system,”(US President George W. Bush told CNN television on December 16th) saying he had made the decision
“to make sure the economy doesn’t collapse.”
It was my preferred quote of 2008, whatever it means…
http://mgiannini.blogspot.com/2008/12/quote-of-year-2008-end-of-capitalism.html
Then President Obama took office and the word “free” is gone…
“Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control – and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart – not out of charity, but because it is the surest route to our common good”.
http://mgiannini.blogspot.com/2009/01/markets-and-free-markets.html
Sorry if this takes an earnest discussion down a few notches, but some of you might enjoy this 1 minute ‘PSA’ for Somalia as Libertarian paradise:
http://www.youtube.com/watch?v=7QDv4sYwjO0
Superb!
Just what is meant by “Free Market Capitalism” is the issue. If it means no rules of conduct, then anarchy is being promoted. Just what is meant by any applied label is the critical issue.
I prefer markets with rules of conduct. I prefer that contracts be honored. I prefer that financial fraud be prosecuted. I have simpler labels, capitalism, socialism and communism. I prefer capitalism. I prefer as little government intervention in the market as possible.
In the case of instruments such as CDS, it is clear that at least one side of the transaction is gambling, speculating if you wish to ‘spin’ the concept. It is also fairly clear that the transaction is a form of insurance against contingent events. We have regulation of futures and option contracts for commodities for precisely the reason that at least one side of the contract is speculating. History is redolent with adverse impact on society of unbridled speculation. To some extent, we have learned our lesson. As to CDS, we have yet to fully apprehend the negative aspect that the contract may have on society. It may well be that that the contract should outlawed. This would especially be the case were the buyer could not demonstrate ownership of an insurable interest. The current failure of AIG and several ‘primary dealer’ banks is the result of abrogated regulatory authority. It is not that any institution too big to fail, it is that we, thru our government, are unwilling to bear the apparent cost of an orderly dissolution of the offending institution. So long as we support failed institutions we will have unwarranted bonuses and profligate speculation.
I am leery of polls generally and this one doesn’t tell me something that I wasn’t generally aware of. What it does tell, and it is well enforced by the commentary in this thread, is that we are having less of a dialogue and more of a diatribe.
I once polling people just for fun.
To the question, ‘Are you an idiot?’ I found;
55% said yes
30% no
15% not sure
To the question, ‘Did you ever lie to a pollster?’ I found
55% yes
30% no
15% not sure
To the question, ‘Do you understand what I am saying now?’
55% yes
30% no
15% not sure
To me, the most remarkable thing about the whole exercise is that consistency of the results.
The poll presented reflects not an overall, global view of “free market” ideology, but the perception of that phenomena through the lens of national experience. Germans will likely evaluate the affects of any economic creed differently than Brazilians, Pakistanis, or even neighboring Poles or French, based on applications and conditions within specific and varied political/financial systems of their respective states; that is, will evaluate the term “free market” less as general theory and more as workings of social order within the individual polled country.
That said, I be interested, in addition to China, in seeing how Ireland and Iceland feel on the subject.
germany moves from bottom to top if you focus on the blue part of the bar…needs more regulation… instead of the yellow…fatally flawed
The economy, like the universe requires a goliath seeking incremental improvement, for the purpose of slingshot, quantum development, and you are better off with the devil you know than the devil you do not know.
Having said that, anyone that feeds goliath – the banking, education, healthcare, and government sectors, controlled by the nexus of public and private insiders – gets more goliath, and goliath fully intends to raise people like cattle, with computer automation systems, beginning with indoctrination right out of the womb.
Goliath, the nucleus, is currently shrinking quite nicely, and if he does happen to exceed his authority in this round, that blackhole out in the galaxy will release the asteroids from the solar belt, and start over again. It wouldn’t be the first time.
Be smarter than his computers, and do not feed him.
(all the “growth” in federal control is simply increasing transparency of what was already there. Tax receipts filter out all the misdirection.)
call it capitalism, socialism, whatever. top down, command and control, systems consume themselves to death, to the exetent you get out of the way.
community economy bundling in the new economy:
A. you need clean water, furtile soil, & natural building materials;
B. you need a seperable community intranet, so government internets have to compete for your participation.
C. parents need to take responsibility for educating their children;
D. communities need to take responsibility for educating their own healthcare workforce;
E. The intranet must develop a transparent physics-based education system to ensure that all participants may effectively deploy their talents, and to ensure an independent energy source.
It will not be possible to participate in the new economies without a basic understanding of the physics that regulate life.
F. You can pay surplus to a few farmers, or split up food production.
G. You cannot profitably specialize community talents to trigger self-reinforcing surpluses until your community is self-sufficient. If your community is not self-sufficient, the nexus will put a gun to your head and liquidate you every single time.
H. The functional old families don’t care for the nexus either, but if new families and individuals are going to feed the beast, they have little choice but to ensure that those feeding the beast get eaten, instead of themselves.
I. The nexus is natural cancer, inserting its own code for replication between production and consumption, charging a fee and depleting both. Government is the net remainder of responsibility not taken by individuals and families. Of course its first move is to disassemble the family, then make its participating components dependent, and finally to systematically exclude the remainder.
J. What people need right now is a natural community intranet platform, seperable from the public utility holding company transmission network. The advanced communities are piggy-backing the existing system, but that is not advisable for others.
all the equipment is already out there, free for anyone that wants to pick it up.
MS is building crappier and crappier code, the utilities are injecting more and more commercials, I is building larger and larger engines to run all the crap, and all the participants are throwing away perfectly good equipment.
and the kids are building all types of transmitters to connect community nodes.
Anybody that pays attention knows that “Capitalism” is totalitarian in nature. Any materialist ideology is.
Without the state to keep the Bourgeois under control, they would have lost the lower caste’s support and resorted to direct genocide at least a century ago. You could argue, the little regimes have already. The US has through sneaky ways, killed as much as Bolshevism, but the brain dead white population doesn’t think it could be them. How little do they know.
“Free enterprisers” and “Libertarians” real goal is the destruction of the “state”(much like the socialists). However, unlike Socialists, they pursue merchantile caste domination. The rules are set by them, the natural elite should even follow them nontheless they are inferior. That is pure anarchy in any worlds. Most Americans don’t even have a furthest out clue of this. They merge it with their sickness of Calvinism and become so called “outlaws” against statism……but yet, they basically are forming a goverence that is statistic themselves. Which in turn promotes and destroys the fabric of society of the merchantile caste.
Most of the business elite in America have long dropped the notion of “free markets”. Because they do not exist. They understand with America now the numero uno economic nation in the world, they need the state to function as a pole for their empire. The “Liberatarian packs” that still exist no matter if they have the lame “paleo” word in front of it(such as Lew Rockwell, a decadent jew in his prime and financed by global jewish money) are people that just don’t want their empire in America, they want a global empire stretching totalitarianism globally with the gold merchants deflating away the national economies of the world. Then they will strip off their true face, a ugly one that is for sure.
The “Bourgeois” have their fole in society, but it is not at the top.
It is surprising to find Germany and France so far apart, the two countries that have been the center of power of the European Union in the past. Or this mainly a sign of the polarization in France between right and left?
To the regulation: Financial markets need regulation, by nature of a fiat currency with fractional reserve banking. I am in favor of strong regulation for banks (who brought us this mess) but free markets for other goods.
I think Yves missed the bigger point here.
There is no single meaning of “free market”. It changed during the last 30 years or so. Initially it was a legitimate counter reaction which reflected the opposition to excessive government intervention and excessive centralization. It also stressed the difference of Western Societies with over centralized and stagnant Soviet Block and as such was supported by the US state machine.
But very quickly it was perverted into a sticky and destructive ideology of “The dictatorship of the market” or as John Kenneth Galbraith aptly put it “In Goldman Sachs we trust” by several players (Reagan, Friedman, Ann Rand as the most prominent). Which was essentially a stealth way to ensure dominance of financial oligarchy that we now have with “casino capitalism” as an established social system. It was attempt to convert the USA into Switzerland of sort with dominant in the world financial sector on the base of dollar as a reserve currency. Destruction of unions and outsourcing of manufacturing also led to the deterioration of the balance of power when there was no countervailing force for financial oligarchy. Results are obvious and were to a certain extent inevitable.
The real problem is that when any ideology even as intellectually bankrupt as “The dictatorship of the market” takes hold in the society it is very difficult to get rid of it. It took the former Soviet Union 70 years to disintegrate. In no way it’s enough to have an intellectual and moral revolution to get rid of the old ideology.
We have what we have and now need to face consequences for years if not decades to come.
kievite,
I have to disagree with you here, and I have made pretty extensive study of the literature as to how the concept evolved.
“Free markets” was taken up quite deliberately as part of a radical right wing push in the 1970s. While the term had been invoked in the 1960s, “free enterprise” was far more popular coinage.
And the idea that businesses were overregulated in the 1970s was completely unproven, but they also marketed that idea aggressively and claimed it led to a lack of innovation. But they had absolutely no proof, indeed, the US was not lagging in innovation (by any measure, BTW), there were cases where regulation had spurred innovation, and in any event, deregulation favors larger enterprises, which research has shown are NOT innovative!
Can I just ask why people have this misconception that capitalism makes people freer? Capitalism doesn’t provide freedom control is merely then given to whoever has managed to harness the most capital resources and power. Its ultimately more suppressive and controlling than any other regime as it least other regimes were based on sharing so vulnerable members would have something. What is free about half the world living on $1 dollar and barely able to eat. Even if regulation was removed this would not change as the world is not an equal playing field, countries do not have access to equally valubable resources under capitalism and it goes on and on and on.
Its a barbaric system taking civilisation back hundreds of thousands of years and thankfully more countries are starting to realise this. Also if we are progressive human beings how does being an ‘organic chicken or battery chicken’ progress us in any way shape or means. It doesn’t even meet number 3 on Maslows needs for the majority of people. Surely this is the age of self-actualisation not the time of peoples families falling apart due to work pressures, divorce is rising, youth crime is rising somethings going wrong.
Also if you notice the person who has harnessed the most resources then controls everyone else. Arent we going back to the class system we just tried to get rid of. Except this class system is not by virtue of birth but by virtue of how much you can afford.
Anyway here is an article I wrote thinking about capitalism
Capitalism : The New God
Trinity:
Individual Satisfaction – Father
Exploitation – Son
Purchasing power – Holy Spirit
10 Commandments
* I will make sure I maximise my profits at the cost of everything else
* Individual satisfaction must be 100% satisified even if it means I cheat on my marriage, destroy my childrens lives and end up divorced
* Exploit whoever you can for whatever you can, its survival of the fittest
* You are what you can afford
* Love thy cheap goods even if you don’t know they came from a child sweat shop
* Thou shall not worship false Gods: socialism, communism, et al
* Thou shall be faithful and not lie with another man’s wife unless our wife failed to deliver for a few days or I see someone else I want in the street round the corner, like the latest purchase from that tv store down the road I just had to have as it was 50 inches wide not 45 like the one I have already.
* Individual success and power are everything crush all enemies that stand in your way.
* Avoid giving money to charity it is rescuing and people should be responsible for their own problems even if they are not self inflicted or were originally caused by our neoliberal economic and political policies.
* Lend support to wars and support dictators if there is cheap oil or cheap access to valuable resources to be gained as our country has to be the most wealthy and powerful.
New Testament Most Important of all these Commands not love thy neighbour :
Love myself and everyone else can have the breadcrumbs that fall from my table
12 Disciples – Enablers, Message Delivery Systems, Promoters
* World Bank & IMF
* Companies that exploit developing nation producers with low and unfair prices
* Advertisements that promote materialism with irresponsible marketing messages
* Pride
* Greed
* Ego
* Vanity
* Banks that don’t support and help small businesses, yet provide huge overdraft facilities to big organisations who really do not need that support .
* Lenders who throw credit cards at people that they can’t afford to have or use
* Banks that wont lend to people who actually need the money and provide the financial support they are supposed to so these people turn to loan sharks and charge huge profitable fees for bounced Direct Debits and unauthorised overdrafts.
* Politicians with delusions of grandeur that want to control the world
* Judas Iscariot – Enlightened invididuals that try to inform people (whistleblowers)
The Evil One
Devil – Socialism and anything resembling socialist systems
Lord’s Prayer
Our Individual Satisfaction
That art all over the world
Hallowed be thy buy one get one free
Thy autumn sales come, Thy supreme shopping experience be done
On earth as it is in the stores
Forgive us for missing the winter sales and we will forgive the stores for closing on Sundays
Give this day our daily buying
Lead us into cheating, sleeping around and not looking after our children
Let us not be tempted to really care about other people
Deliver us from socialism
For thine be the kingdom, the power and the glory, for as long as we practice this awful economic concept
Amen
Note: writers note this is a criticism of capitalism in an attempt to make a few points and is no way shape or form supposed to represent the real bible and the Word of God within it.
Copyright @ Jill Barraclough 2009 Please feel free to circulate this article with the copyright notice, authors name, contact details and Note above included. Writer can be contacted @ loventruth@hotmail.com , or jillb@jillb.me, or website is http://www.jillb.me.
They would only have 50 cents and wouldn’t be able to eat al all if it weren’t for capitalism, or they’d be eating each other and wearing loin cloths. And I’m tired of hearing about all this capitalism bashing. Really. How about the Gulag or life as an Azetc or being one of those Eskimos that freezes in an igloo without any heat or hot water. Out there on the ice with a spear in February and not even 50 cents for a Beef Jerky. That’s a hard life, for the seals too. And when they put the airport up there and bring in the tourists then how many of those guys wants to sit in the Igloo or ot on the ice when they can sit in the bar and drink and smoke and go to Denny’s. It’s a tough one, figuring that one out. The answer is written deep in the heart but all they want to do is cut it out and eat it, after they get the brainwash from the priests (I’m talking Aztecs), The Eskimos weren’t into that stuff, as far as I can tell. I’m an Antropologist at the Unversity of Magonia and I specialize in neo-contemporary analysis and group psychology. I’ve determined that capitalism is a psychological exoskeleton for a certain stage in the evolution of tribal consciousness in its primary breakdown stage when it exfoliates a moral indvidualism, and when the earth passes through the galactic center things will jump to a new level of comunality. -Maxwell Marx, PhD
It is good to see that the US at least has more people that believe more government is bad.