December 29, 2008

"Free Market"

This is an extremely rare edition of "No, not what digby said."

Writing about the dominance of conservative messaging on the economy in the latter half of the 20th century. She quotes a guy who makes a sweeping and false statement, about Keynes dominating the first half of the 20th century and Hayek the second half, noting that it is not clear that it is "exactly true." As part of that correction, she notes:

Free market fundamentalism (which Hayek didn't actually believe in --- he was more of an evangelical) has certainly been the order of the day for at least a quarter of a century and animated the arguments of the aristocracy(.)


It's important to realize that while this is the message of the Republican party, and of other conservatives, it is not their policy position. Free market fundamentalists abhor concentration of economic power, in oligopolies as well as in the state. American conservatives, especially those in the Republican party, are better characterized as, for lack of a better word, fascist. Crony capitalism is a euphemism for this, with the false implication of competition implied by "capitalism." They believe in the adoption of policies that encourage the formation of oligopolies, and that intertwine those oligopolies with the government.

The taxpayer's role is the same as the consumer's role--to provide monopoly pricing and profits to companies protected from free market competition. You see this everywhere. From the taxpayer's perspective, you see this in the replacement of civil service functions by private no-bid contracts, telecommunications companies integrated into the intelligence community, Blackwater, Haliburton, and pretty much all of the military procurement budget.

From the consumer perspective, you see it in the abuse of patents in Big Pharma's interest, elimination of the public domain from copyright law, preservation of monopoly pricing in telecommunications, cable television, practical exemption from anti-trust law, giving away television spectrum, regulations designed to create barriers to entry by new firms and lots of little policies like not allowing people who intend to leave timber standing to participate in the bidding process. Or not allowing the cattle farmer to note on the label of his beef that he tests all his cattle for mad cow disease, not just the federally required sample.

It's very bad that this meme--the idea that American conservatives favor free market solutions--has been allowed to so completely penetrate discussion about economic and regulatory policy. It's simply not the case that Republicans are free market advocates any more than they are free trade advocates. There may have been some possibility for making this claim before the 2000 elections. But with control of all three lawmaking branches of government by Republicans, free market policies were rejected, while policies designed to encourage greater industrial concentration, less competition, and greater concentration of wealth were embraced.

All of these policies had the effect of making government larger, more intrusive, and directly engaged in providing revenue from general revenues to oligopolistic corporations. There is no "free market" in these policy positions.

[Update: some minor edits for clarity]

5 comments:

stuart_zechman said...

Are the Democrats (currently in power) substantially different in their policy prescriptions or ideology from these "Free Marketers" in the Republican party?

Jay Ackroyd said...

Yes. They are substantively different. Democrats are very much on the side of the use of civil servants, in unions, at lower costs to the taxpayer, a longer institutional memory and undivided loyalties.

They are much more likely to enforce the laws and regulations that are designed to protect consumers and regular people.

There is corruption, yes. But it is not the kind of systematic loot the treasury that the republicans have engaged in.

Jay Ackroyd said...

Here's a link that refers to this, wrt to OSHA.

http://www.washingtonmonthly.com/archives/individual/2008_12/016226.php

stuart_zechman said...

OK, you've made a case for the regulatory difference, but with respect to:

American conservatives, especially those in the Republican party, are better characterized as, for lack of a better word, fascist. Crony capitalism is a euphemism for this, with the false implication of competition implied by "capitalism." They believe in the adoption of policies that encourage the formation of oligopolies, and that intertwine those oligopolies with the government action.

, and
...you see it in the abuse of patents in Big Pharma's interest, elimination of the public domain from copyright law, preservation of monopoly pricing in telecommunications, cable television, practical exemption from anti-trust law, giving away television spectrum, regulations designed to create barriers to entry by new firms...


, are you able to make a case that the current Democrats aren't perfectly content promulgating oligopoly?

JJ said...

"American conservatives, especially those in the Republican party, are better characterized as, for lack of a better word, fascist." I think "Plutocratic" works better, even though it's a bit of a hackneyed term. (I'm a bit of a purist when it comes to Godwin's law.) But I agree with you that they're not pure fundies. Jon Chait had some good material on this in *The Big Con.*

OTOH I think "market fundamentalism" is kind of a rough term and it works. And it parallels nicely with the other kinds of fundamentalisms that conservatism is rife with...