Re: The Free Market Myth

I urge everyone to consider this latest and mostly excellent article, "Free Market Myth" by Mr. Dean Baker. In the article he explains that regulation of markets is neither good nor bad, neither liberal nor conservative. The question is will they be regulated to increase equality of opportunity (making medicine/credit/whatever affordable for the poor), or to increase the share of the pie going to the rich (via patents, copyright, or bankruptcy abuse prevention act of 2005)?

I say the article is "mostly excellent" because Baker makes the mistake of pandering to the libertarians with this erroneous statement: "Deregulation can be a principled position held by true believers in a free market."

In fact, there is no such thing as a "free" or deregulated market. Markets (based on money) are always dominated by one or more groups, almost always to the detriment of the majority who participate in them. Regardless of how well markets may advance overall prosperity, they will never do so as efficiently as moneyless cooperation has the potential to do. But more importantly, "unregulated" markets serve to ensure that the rich increase their wealth at the expense of the poor.

"Free trade" is a perfect example. It sounds great, but what it means is that rich people are free to pay the lowest prices anywhere on the globe to buy or produce what they wish--destroying middle classes and removing opportunities for real economic development from the 3rd world nations. Most economists, of course, argue that these low amounts paid to workers in the developing world are actually their keys to prosperity, since they mean better wages than were before earned in agriculture. But these economists propose a false dilemma. Lack of slightly better wages in sweatshops does not mean workers will be cursed to forever toil the fields with misery and ignorance as their reward. There is a third way: cooperation. It worked in many tribal societies who seemed to enjoy great leisure (enough to spend time on all kinds of elaborate rituals and storytelling) and even luxuries (feasts, child care networks) that the modern developing world's workers and even some in the developed world could only dream of. It also worked for the Spanish Anarchists for a few years, in more recent history.

"Fair trade", based on the idea that markets should not be oppressive, is a more subtle version of an oppressive free market in which the rich voluntarily throw some bones to the poor. The key word there is voluntarily--and that means that the poor are still at the whim of the rich.

The alternate Golden Rule is true: Those who have the gold, make the rules. Government doesn't shackle markets, markets are shackles in and of themselves. Short of abolishing markets entirely, government can shape them to be less oppressive to those without wealth, but most often, government, even when "democratically" controlled, sides with the rich and acts to further extort the poor. The sad vulnerability of democracy is that it functions only to the extent that information is able to be obtained and analyzed critically--and when schools train children to be good workers, and corporations control the information, democracy is only a facade for plutocracy.