Critical DisBelief

When certainty becomes uncertain…

What’s Wrong with Free-Market Capitalism? Part II

If there is one word which needs to be taken down a notch in today’s political discourse it is the word “free”. When a word begins to mean too many different things it becomes useless and a pretext for hiding intent. Under the banner of “freedom” we have everything from the noble struggle for freedom of slaves in America to the modern neo-liberal agenda of free trade – the latter less than noble and arguably a movement in the opposite direction, enslaving millions.

“Free” means different things to different people, it’s actually a relative word. There is no absolute freedom: we all have to eat and sleep and stay warm and dry and cannot escape these basic limitations and needs. Most of us feel we have duties to others, our families, our society which we choose not to escape. The idea that this or that political system will make us “truly free” is very dubious: what free trade really delivers to many people is freedom from basic human dignity, freedom from food, freedom from good things which they need.

But let’s begin on the right, the conservative side of the debate confusingly called “neo-liberal”. Neo-liberal capitalism has nothing to do with classical leftist liberalism which was about liberating people, progressing from oppressive laws and political structures, and giving ordinary people a say in government. Liberalism, progressivism is a struggle against oppressive traditions and power structures. Conservatism harps back to these traditions and serves the power structures, the rich, basically neo-aristocratic powers-that-be. The modern, right-wing “neo-liberal” agenda is the liberation of capital!

The idea is that free markets, with little or no restraint, will blossom bringing prosperity for all. Even if some few people get incredibly rich, the lower classes benefit from a trickle-down effect[1] which implies that wealth get’s spread around. Ironically the idea of wealth redistribution is a liberal idea, offensive to those on the right. Of course if you’re rich you object to wealth re-distribution because it will usually mean away from you! And those on the right are, in my opinion, basically either rich or misled (presumably by the rich).

Proponents of liberal, supposedly “free” markets sing praise to the rewards their idea has brought the west. As with any propaganda, they claim all of today’s obvious western comforts, wealth and securities for themselves: capitalism gave us this glory! But I beg to differ and there is so much wrong with that statement it’s hard to know where to begin.

Firstly it’s clear, to me at least, that it was technological innovation and discovery which gave us most of this. Inasmuch as an accumulation of wealth lent at interest supported these discoveries, to that extent we have visionary investors to thank. Their role is not minor but it is secondary: investors produce nothing – money is but one part in developing technology. Money can also be gathered cooperatively, be provided privately (by the inventor themselves) or simply saved for. The idea that each inventor needs capital markets in order to invent is absurd – most inventors only get the ears of investors and hence capital once they have invented. It is also usually only when an invention moves to production that it needs huge sums of money at which time the enterprise is commercial and industrial. Commerce and industry need capital true, but let us not forget that the great ideas came before or without capitalism. People invent because they enjoy it (seriously) and because society has a need. Read even the modern biographies from Flemming (penicillin), Bell (telephone) to Gates (Microsoft). These great men were not fuelled by greed but by enthusiasm. Capital fuelled industry which made the capitalists rich and rarely brought the benefits to the whole world.

Secondly it seems to me clear that, historically, capitalism has morphed into something different today than it has been in the past. We are talking different scales and different modes. What began a few working people putting their savings together to buy a shared machine has today become even fewer incredibly wealthy non-working people clicking a mouse to shift money (digital bits and bytes) from one account to another and back to make more money. If you have the means, you can today buy up several hundred thousand tonnes of rice (futures) destined for mouths, re-route and re-sell it to ethanol producers and make a hefty profit. You could also make a loss true, but the point about the super rich is that they mostly make a profit.

And so, we have allowed resource apportioning to become a gamble which is bad enough but in a casino which only admits the already rich which is a travesty. It would be a sorry state of affairs in which everyone was poor and struggling and every month, one person was chosen at random to become a multi-millionaire. For that reason lottos are obscene. But our financial markets, fuelled by free-market capitalism are worse: they are lotto schemes where only the rich get tickets. Money attracts more money, the poor get poorer the rich get richer.

The president of the Swiss lobby for free-market capitalism (Economiesuisse) was quoted this week (NZZ 20.3.13) as saying: freedom is and must be societies highest value. If you follow what I have written above and know what the Right means by “free” – i.e. freedom of Capital – then you’ll know that this is not an “I have a dream” speech of liberation for people but more of an ironically honest but veiled declaration of war on the poorer- and middle-classes. What they are really saying is: under the veil of freedom we will push our agenda which moves wealth up the ladder to those who already have too much of it.

The next time someone speaks of freedom think about from what? and for whom? Ask them if they believe in freedom as a blanket concept (as in let’s open the borders and jails!) or whether freedom is a relative term meaning freedom from this evil to enjoy this good. And what are these higher goods? We need to move the discourse away from abstract “freedoms” – as it is bandied about in the USA – and towards concrete goals. Do we want freedom from hunger? For everyone? That’s a Good Goal, let’s work towards that before we start trying to liberate capital to who-knows-what end.

The “liberation” of markets has meant untold suffering for millions of people in the third world. Our free access to their products (which they make but our corporations and their leaders sell at profit) has not made them more free but enslaved them to dependence on us in a miserable existence on the poverty line. We are free from tedious labour, poisonous working conditions and receive cheap packaged goods at their expense. When we buy labour we buy someone’s hours, their very life. When they sit in a factory for 12 hours so we can have cheap phones or shoes it is their freedom which is financing our luxury.

The neo-liberal reply to this is that if we didn’t buy their goods, they’d lose their jobs and have to go back to rice paddies and starvation. Well that’s probably a myth but even if it were true: if our trade is able to lift them out of poverty it should not leave them flailing at the poverty line if we can help it. And we can help it: if we would pay more and picket more for just working conditions and pay we could lift them up and still enjoy the benefits of trade. The argument against Free Trade is not No Trade but Fair Trade. Do it, but do it right and conscionably.

What’s wrong with Free-Market Capitalism? It enslaves millions, it’s unfair and enriches very few people which is undemocratic because money is power as we shall see….

[1] To which some witty american quipped: “Something’s trickling down all right but I don’t think it’s wealth”.


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