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Thread: Why the Idea of a "Free Market" Is Total BS

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    Why the Idea of a "Free Market" Is Total BS

    Why the Idea of a "Free Market" Is Total BS


    There has never been and never will be a "free" market. All markets have rules.

    September 16, 2013
    |

    AlterNet.org
    By: Robert Reich
    http://www.alternet.org/why-idea-fre...-bs?page=0%2C1


    One of the most deceptive ideas continuously sounded by the Right (and its fathomless think tanks and media outlets) is that the "free market" is natural and inevitable, existing outside and beyond government. So whatever inequality or insecurity it generates is beyond our control. And whatever ways we might seek to reduce inequality or insecurity -- to make the economy work for us -- are unwarranted constraints on the market's freedom, and will inevitably go wrong.

    By this view, if some people aren't paid enough to live on, the market has determined they aren't worth enough. If others rake in billions, they must be worth it. If millions of Americans remain unemployed or their paychecks are shrinking or they work two or three part-time jobs with no idea what they'll earn next month or next week, that's too bad; it's just the outcome of the market.

    One of the most deceptive ideas continuously sounded by the Right (and its fathomless think tanks and media outlets) is that the "free market" is natural and inevitable, existing outside and beyond government. So whatever inequality or insecurity it generates is beyond our control. And whatever ways we might seek to reduce inequality or insecurity -- to make the economy work for us -- are unwarranted constraints on the market's freedom, and will inevitably go wrong.

    According to this logic, government shouldn't intrude through minimum wages, high taxes on top earners, public spending to get people back to work, regulations on business, or anything else, because the "free market" knows best.

    In reality, the "free market" is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what's private and what's public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on.

    These rules don't exist in nature; they are human creations. Governments don't "intrude" on free markets; governments organize and maintain them. Markets aren't "free" of rules; the rules define them.

    The interesting question is what the rules should seek to achieve. They can be designed to maximize efficiency (given the current distribution of resources), or growth (depending on what we're willing to sacrifice to obtain that growth), or fairness (depending on our ideas about a decent society). Or some combination of all three -- which aren't necessarily in competition with one another. Evidence suggests, for example, that if prosperity were more widely shared, we'd have faster growth.

    The rules can even be designed to entrench and enhance the wealth of a few at the top, and keep almost everyone else comparatively poor and economically insecure.
    Which brings us to the central political question: Who should decide on the rules, and their major purpose? If our democracy was working as it should, presumably our elected representatives, agency heads, and courts would be making the rules roughly according to what most of us want the rules to be. The economy would be working for us; we wouldn't be working for the economy.

    Instead, the rules are being made mainly by those with the power and resources to buy the politicians, regulatory heads, and even the courts (and the lawyers who appear before them). As income and wealth have concentrated at the top, so has political clout. And the most important clout is determining the rules of the game.

    Not incidentally, these are the same people who want you and most others to believe in the fiction of an immutable "free market."

    If we want to reduce the savage inequalities and insecurities that are now undermining our economy and democracy, we shouldn't be deterred by the myth of the "free market." We can make the economy work for us, rather than the other way around. But in order to change the rules, we must exert the power that is supposed to be ours.

    Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama's transition advisory board. His latest book is Aftershock: The Next Economy and America's Future. His homepage is
    www.robertreich.org.


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    The interesting question is what the rules should seek to achieve. They can be designed to maximize efficiency (given the current distribution of resources), or growth (depending on what we're willing to sacrifice to obtain that growth), or fairness (depending on our ideas about a decent society). Or some combination of all three -- which aren't necessarily in competition with one another. Evidence suggests, for example, that if prosperity were more widely shared, we'd have faster growth.

    Apparantly Reich kan see thru the free market baloney but karnt see thru the growth baloney.
    No mention of future eating (but duz mention pollution).
    mac.
    Last edited by cushioncrawler; 09-17-2013 at 04:46 PM.

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    The rules can even be designed to entrench and enhance the wealth of a few at the top, and keep almost everyone else comparatively poor and economically insecure.

    Reich thinx that u karnt hav ultra rich without having at least a number of poor. Not so -- u kan hav ultra rich getting even richer while having zero poor.
    Or praps reich did mention that. I will havta read again.
    mac.

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    If we want to reduce the savage inequalities and insecurities that are now undermining our economy and democracy, we shouldn't be deterred by the myth of the "free market." We can make the economy work for us, rather than the other way around. But in order to change the rules, we must exert the power that is supposed to be ours.

    Reich makes 2 mistakes here.
    Reich duznt realize that what iz undermining the economy iz krappynomicysts. Krappynomix rules.
    Reich duznt realize that demokracy iznt the solution, demokracy iz the problem.
    mac.

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    Its funny that Reich haz accidentally mentioned the answer -- and he duznt realize. The answer iz the Third Reich.
    Hitler fixed things in a Keynsian way in Germany tween early 1933 and late 1933 -- albeit with extra rules (no free market). Well, it would hav been Keynsian, if Keynes had published 3 years earlyer.

    And theusofa got rid of its free market during WW2 -- worked well -- zero unemployment, allmost zero inflation (not that inflation iz a problem, just saying).
    mac.

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