The idea of a benevolent “Free Market” is exposed as a dangerous fraud

September 19, 2008 | By | 6 Replies More

At a Salon.com article entitled “The corporate financiers are wrong,” Joe Conason says the obvious about “free market” fanatics because it is necessary to say the obvious about “free market” fanatics, given that they’ve been so successful at promulgating their drivel.  What is the obvious thing we now need to say?:

Now that we’re all about to take on hundreds of billions or perhaps a trillion dollars in new public debt to redeem the nation’s super-smart corporate financiers, there is one thing I hope we can expect in addition to postponing the apocalypse. Will they all please shut up about the wonders of the unfettered free market and the horrors of big government?

For decades, the investment class and their mouthpieces in the conservative movement have been telling Americans that if only we repealed all those musty old New Deal rules and programs, then we could enjoy unprecedented prosperity. Repeated endlessly by the think tanks, magazines and academics of the right-wing machinery, this message eventually drowned out the reality-based ideas of the American liberal tradition. Although those were the ideas that had actually built this country over the past century, they were erased from public consciousness by a combination of amnesia and propaganda.

There is no commercial fishing in the North Atlantic–we’re over-fished it to the point of ruin.  Thousands of people have died or suffered great injury due to defective pharmaceuticals and tainted foods.  There are thousands of other reasons to reject the facile idea that the “free market” will take care of us. What more proof do we need that the “free market” will automatically take care of us than the economic meltdown we are now experiencing? Consider these chilling words of testimony given by Fed chairman Ben Bernanke to Congress today:

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

For more of my ongoing aggravated skepticism regarding conniving and/or naive claims that the almighty, benevolent “free market” will automatically take care of us, see here.

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Category: Economy, ignorance, Politics

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (6)

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  1. Erich Vieth says:

    It turns out free markets are the greatest system on earth, but only when they go up. Market discipline is for low income people and homeowners.

    http://www.huffingtonpost.com/zack-exley/understa

  2. Erich Vieth says:

    Here's another description of the cause of the meltdown:

    [The answer is] the timeless power of hubris during periods when profits seem easy, and a set of foolish financial notions that have become prevalent over the past three decades.

    One of those beliefs is the indiscriminate anti-regulatory ideology one hears preached on Wall Street with tent-revival fervor. What makes this thinking so perplexing is that many of the free-market true believers also assume the federal government will save them if they flop. Consider the extraordinary taxpayer-backed rescues of insurance titan American International Group, housing financiers Fannie Mae and Freddie Mac, and, before those, the Treasury-guided merger of Bear Stearns into JPMorgan Chase. It brings to mind the homeowner who rants about getting Washington off his back but wants federally guaranteed flood insurance no matter how close to the Gulf Coast he builds his house.

    http://www.msnbc.msn.com/id/26793500/

  3. Niklaus Pfirsig says:

    September 19, 2008 will be a memorable day in the minds of those who work and live in Nashville Tennessee. It was the day that Nashville ran out of gasoline.

    Some time during the morning rush hour, radio stations announced that a few gas stations had sold out of gas.This prompted a run on major franchise stations, which, when faced with over four times the normal volume of customers, also ran out of gas. The panic level escalated and people began to arrive at the remaining stations with all the gas cans they could find, filling their vehicles and in some cases as much as 30 additional gallons in fuel containers.

    .

    By noon, 19 out of every 20 stations had sold out. Those remaining open had long lines, and many people had run out of gas while waiting. Many more had run out while trying to find stations that still had gas.

    The evening commute was accompanied by a ripple effect as the panicked commuters

    stopped to fill up in neighboring towns.

    A live report on the late news, at 10:00 local time, indicated only a handful of stations with gas, which were using police protection for crowd control.

    Throughout all this, gas prices rose to over $4.50 per gallon(From $3:90 on Thursday). This is a shining example of the "Free market" in action.

  4. Erich Vieth says:

    I know that I harp on this point repeatedly but we've got to stop thinking about the unregulated market as "free" or "benevolent." One way to do this would be to start referring to the unregulated market as the "Wild West Market." Or how about "The Cheater's Market"? Or "The Predator's Market"?

  5. Erich Vieth says:

    Karl Marx, were he still about, would surely be interested in the report that unregulated free-market capitalism has died in a flash, by its own hand; whereas it took 70 years and a Cold War to bring down the Marxist economy established in the Soviet Union following the Bolshevik Revolution.

    http://www.truthdig.com/report/item/20080918_real

  6. grumpypilgrim says:

    What I find most baffling about the myth of the benevolent "free" market is that social conservatives are constantly calling for less government regulation of the market (because, they say, "free" markets are good), but these very same people also want more criminal laws, more prisons, and more restrictions on personal liberties, because they believe we are all driven by greed and selfishness, and would readily murder our neighbors if there weren't laws that forbade it.

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