The death of free market fundamentalism?

April 29, 2010 | By | 2 Replies More

Richard Eskow is more optimistic than me about the “death” of free market fundamentalism. Here’s part of what he had to say at Huffpo:

We’re . . . seeing the death struggle of a dying ideology. This ideology provided intellectual cover to business and political elites for decades, but events have proved conclusively that it doesn’t work. What’s more, people are beginning to see that it’s inconsistent with the country’s traditional values of competition and free enterprise. . . . While the theories and rationalizations varied wildly, the conclusions were always the same: Deregulation was always the right approach, even (especially) for the most concentrated and rapacious businesses. Consumer regulations should be avoided because they hurt everybody, especially (somehow) consumers. And cutting taxes for the rich magically made things better for everybody else.

The arguments changed but the results were consistent: greater upward distribution of wealth, and more concentration of power, delivered by those the special interests funded and placed into positions of influence. . . . Now the ideology lies in ruins.

I am sold by Eskow’s description of why free market fundamentalism should be publicly discredited.  But I think Eskow is over-optimistic about the “death” of that idea: In modern times, ideas get their legs from a combination of truth and power.  We might have truth on our side, but we don’t have the power. There’s still too much money to be had by too many big business by promulgating fair market fundamentalism.

Lack of regulation and lack of transparency simply makes too much big money for many big businesses, many of whom have bought substantial control of the media, as well as having bought Congress. I don’t think free market fundamentalism will die until there is real debate, but that won’t happen without campaign finance reform and media reform.  If the “merits” of free market fundamentalism were ever freely debated in the media, it would shrivel and die, but have a long way to go before that pernicious idea is fairly and freely debated.

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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.

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  1. KennyCelican says:

    The problem with the entire debate over the free market is that the sides do not have a common frame of reference.

    On one side, there are obvious social and legal problems that have been caused by an unregulated free market. Unjustifiable economic inequality, poverty, abusive or oppressive laws, the list keeps going on.

    On the other side, there are examples of regulations that have stifled creativity, regulations that have oppressed consumers as much as they did suppliers, and opportunities and entrepreneurs who would have revitalized economies but were stopped cold by over-regulation.

    A free market isn't a magic wand that will fix economies. It also isn't a mythical beast that will kill them. It's an unregulated environment where evolution can act freely. New things can crop up, old things can die off, and the only rule is survive.

    That's useful to have (which, by analogy, is why we protect the rainforest), but isn't a good thing for large societies to be engulfed in (which is why we don't LIVE in the rain forest). You're correct in arguing the latter, you're also correct that free market fundamentalism isn't going to die because the opposition only sees the former.

    • Erich Vieth says:

      Kenny: I see the issue as the need for good regulation, because we will regulate ourselves one way or the other. We might as well figure out how to best make good choices. In a big complex society, it's no longer possible to do this effectively on an informal basis. We can informally self-regulate in small groups, but not large groups.

      I agree with your analysis, that we lack a coherent frame of analysis when the endpoints are merely free market versus regulation. See this post. http://dangerousintersection.org/2009/10/08/regul

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