'Free market economics' is one of the major political forces today.
It sounds good on its simplistic and misleading sales pitch - 'the invisible hand of the market will most efficiently do things, and government only causes inefficiency and waste'.
Many people - whether uninformed citizens or in some cases Nobel Laureates - don't seem to take it much further than that before becoming soldiers in the war for that cause.
But let's look at just one example for the inadequacies it shows in free market economics.
NAFTA was passed as 'free trade'. And indeed, it had the effect of allowing far more efficient mega corporate farmers in the US who could produce corn much more cheaply than small farmers in Mexico, to sell corn there, and the price of corn was lowered 70%. When the story stops there, this is a great victory for free market economics - efficient, lowering the cost of goods, just think of all the benefit to Mexicans who can eat more affordably.
There's at most some fuzzy words about 'and all the farmers displaced get moved into more productive activities, no one loses'.
But what actually happened is that this totally devastated the Mexican corn farming industry. They simply could not make a living - even as cheap as the cost of living is in rural Mexico - and a million corn farmers out of business fled in desperation across the border to the US for hopes of making money.
Where we have our poor handling of the issue, filled with politicization and neglect of any human concern, leading to all these situations like the 'dream children'.
The actual human societal needs to ensure that people have needs met, have opportunity, a societal interest in broader distribution of wealth instead of oligarchy where most are poor in service - if they're lucky - to the few extremely rich - all of these things basically have no place in 'free market economics'. They have no idea how to government consistently with any democratic, any humanistic values. They write this off with vague and false platitudes that somehow the generated wealth will find its way into everyone's hands.
But it doesn't - and the more concentrated wealth is, the worse it gets.
Historically, these things have led to revolutions - France in the 1790's, Russia in the early 20th century, and so on. But that's no longer practical, not that it was every pretty.
What would you think about the suggestion that tomorrow, we take a third of the bottom 99% of Americans' wealth from them, and hand it to the top 1%?
You might think that's a terrible idea, no one is suggesting it, and there's no way that could happen.
But while the third figure isn't exact, that's exactly what happened when you look at the 2008 crash. It wiped out something like that much wealth - and in the years after, the economy recovered overall - the stock market more than doubling from 7000 to over 15000 - yet something like over 95% of all the recovery wealth went to the top 1%. So the net effect was for the 99% to lose all that wealth, and only the 1% gained it all. And yet who is discussing the issue that way?
But that's the real result of 'free market economics' - no real concern or ability to have much of any idea about how to govern and the well being of all the people - just some legitimate policies about how to create some wealth, but with that wealth likely going into very few hands at great expense to most, if the political system doesn't balance that - but the balancing of that, what democracy is supposed to do, is demonized by the 'free market' supporters as 'redistribution' like that's a bad thing.
I haven't seen them complain at all about the redistribution of wealth to the top, only to a more equal society.
Some people simplistically equate a better distribution of wealth with the extreme of some 'everyone has the same amount' communist theory, which is completely false.
John Kennedy said - because it was true then - that 'a rising tide lifts all boats'. But since Reagan, over 90% of the public is flat or worse on income, while the top few get all the massive increases in economic productivity - even as the increases are so large the economy has more than doubled in size, wth nearly all the increase to the top 1% - and nearly all of it to the small fraction of the top of that 1%.
But what's happened is a political/propaganda effort to get people not to oppose this, but to support it.
The Koch brothers - since the 1970's advocates of a radical libertarianism in the US - saw their wealth grow in recent years from $7 billion to well over $50 billion - giving them plenty of money to buy this change in the US public opinion as they fund hundreds of radical right people and groups. For just one example - the far right Scott Walker, viewed as a 2016 presidential possibility, didn't grow organically in Wisconsin politics - his biggest donor was the Kochs.
I've broadened from the example of US corn in Mexico and free market economics, because of how the same problem can happen and is happening to much of the US.
What are the solutions of the free market advocates to the needs of the American people? Impractical platitudes - the poor are to blame, not the policies. And like any propaganda there's a nugget of truth - the poor are not perfect, but as propaganda, it exaggerates that nugget into a lie to hide the larger issues.
Democracy is supposed to be about the people being able to use the vote to recognize these things and pass policies for the good of the people - things like progressive taxes and investments in public education and healthcare. 'Free Market Economics' happen to align with the interest of the very wealthy in creasing their wealth despite the great harm to the rest of society - putting it directly at odds with the democratic principles and goals for society to be better for everyone, not a few at the expense of everyone else.
This is a matter of degree - democracy is happy for some to have a lot more than others - it's the unproductive extremes where it's a problem, oligarchy, where the government is controlled by a few, where the economy is less productive to protect the wealthy and wealth is concentrated to such an extreme as to hurt the rest of society greatly.
Modest inequality of wealth increases productivity; extreme concentration reduces it, and there's that pesky question about how well it's distributed.
Free Market is a simple phrase, easy for people to sign up for, equating the nice word 'freedom' with the word 'free' in 'free market', implying that anything else is some evil communist approach that will 'make everyone equally poor', which is nonsense but effective propaganda. It becomes a religion and cult for many. All they ask about a policy is, 'is it free market?' Nothing else matters to them. And that's a way to have disastrous policies, instead of the 'good governence' that addresses people's and society's actual needs.
When progressives saw the opportunity that educating the public would be a win win increasing economic productivity and enriching citizens, they invested in an explosion of public education in the country - which often meant early on free public education, paid for by the taxes of the people when employed later. And it worked. But 'conservative' ideology, 'free market' ideology, chipped away until, under Reagan as Governor, California was the last state to end the 'free' part - and in the continued 'free market' growth, well intended policies for student aid have been exploited by a largely worthless for-profit explosion in private colleges that are very good at spending big bucks to recruit students, get all the government money for their education, and spit them out without an education but with lots of debt, pocketing vast sums along the way - a system defended by 'conservatives' who are convinced that the private schools just have to be better simply because they're private, ignoring all the facts, data, studies showing what a massive scam it is - with their solution if they have to address it not being to fix the corruption, but reduce the financial aid.
Bottom line - 'free market' ideology has some limited use to increase productivity, but unless balanced by a democratic culture protecting the people, will lead to oligarchy.
Free market economics is not in any way an effective system of governing a society or protecting the interests of the citizens.
What does it offer to the million Mexican farmers driven to flee their home in desperation?
Nothing but starvation, lack of medical care, poverty, prison, deportation, misery and a scolding to do something more productive, it's their fault.
Sometimes, some inefficiency has some benefits. When a Wal-Mart comes to town, and puts all the surrounding small businesses out of business, it legitimately lowers the cost of goods - yet replaces more middle class employment with low-wage Wal-Mart employment if they're lucky, while taking enough money out of the local economy that used to stay in it to pay massive profits to the corporation, including the wealthiest family in the world. Maybe that local economy is better off with some inefficient small businesses and keeping wealth.
Maybe Mexico is better off with higher corn prices and the million farmers employed.
And maybe not - but the way that should be decided is by democratic leaders, not a blind ideology dedicated only to narrow economic growth and not concerned with the people.
There are often 'hidden' interests at work in these things - for example, everyone will say they're for all Americans doing better, but in the short term, the poorer the people are, the cheaper the labor costs for the wealth - putting them at direct odds with the prosperity of the people, something they'll never admit, but will fight hard for.
Free market economics should be viewed not as some American principle, but rather as a tool that can be useful carefully applied, but is a great menace to society when excessive.
Instead, today, more than anything in our political culture it's a cult with followers not understanding they're hurting their own well being.
Earlier I mentioned Nobel Laureates - even radical free market supporters like Milton Friedman - whose economic theories were followed to disaster in the laboratory of Chile under Pinochet - recognized this issue enough that he advocated a 'universal minimum income' for everyone in an attempt to counter the great harm to people of the policies - a policy soundly renounced by today's right. Even Reagan - a Friedman supporter - backed this supporting the 'earned income tax credit', also an issue for today's right.
But that just shows they had some understanding how the policies were lacking - the solutions were not enough.
What HAS worked well is Keynesian economics - leading to great American growth, when that 'rising tide lifted all boats', to the point that even when Democratic governance ended with Nixon, Nixon still said, 'we're all Keynesians now', because the policies had been so proven.
But that was before the war to replace them with 'free market economics' and decades of shifting wealth to the rich and everyone else no longer getting a share of growth.
It sounds good on its simplistic and misleading sales pitch - 'the invisible hand of the market will most efficiently do things, and government only causes inefficiency and waste'.
Many people - whether uninformed citizens or in some cases Nobel Laureates - don't seem to take it much further than that before becoming soldiers in the war for that cause.
But let's look at just one example for the inadequacies it shows in free market economics.
NAFTA was passed as 'free trade'. And indeed, it had the effect of allowing far more efficient mega corporate farmers in the US who could produce corn much more cheaply than small farmers in Mexico, to sell corn there, and the price of corn was lowered 70%. When the story stops there, this is a great victory for free market economics - efficient, lowering the cost of goods, just think of all the benefit to Mexicans who can eat more affordably.
There's at most some fuzzy words about 'and all the farmers displaced get moved into more productive activities, no one loses'.
But what actually happened is that this totally devastated the Mexican corn farming industry. They simply could not make a living - even as cheap as the cost of living is in rural Mexico - and a million corn farmers out of business fled in desperation across the border to the US for hopes of making money.
Where we have our poor handling of the issue, filled with politicization and neglect of any human concern, leading to all these situations like the 'dream children'.
The actual human societal needs to ensure that people have needs met, have opportunity, a societal interest in broader distribution of wealth instead of oligarchy where most are poor in service - if they're lucky - to the few extremely rich - all of these things basically have no place in 'free market economics'. They have no idea how to government consistently with any democratic, any humanistic values. They write this off with vague and false platitudes that somehow the generated wealth will find its way into everyone's hands.
But it doesn't - and the more concentrated wealth is, the worse it gets.
Historically, these things have led to revolutions - France in the 1790's, Russia in the early 20th century, and so on. But that's no longer practical, not that it was every pretty.
What would you think about the suggestion that tomorrow, we take a third of the bottom 99% of Americans' wealth from them, and hand it to the top 1%?
You might think that's a terrible idea, no one is suggesting it, and there's no way that could happen.
But while the third figure isn't exact, that's exactly what happened when you look at the 2008 crash. It wiped out something like that much wealth - and in the years after, the economy recovered overall - the stock market more than doubling from 7000 to over 15000 - yet something like over 95% of all the recovery wealth went to the top 1%. So the net effect was for the 99% to lose all that wealth, and only the 1% gained it all. And yet who is discussing the issue that way?
But that's the real result of 'free market economics' - no real concern or ability to have much of any idea about how to govern and the well being of all the people - just some legitimate policies about how to create some wealth, but with that wealth likely going into very few hands at great expense to most, if the political system doesn't balance that - but the balancing of that, what democracy is supposed to do, is demonized by the 'free market' supporters as 'redistribution' like that's a bad thing.
I haven't seen them complain at all about the redistribution of wealth to the top, only to a more equal society.
Some people simplistically equate a better distribution of wealth with the extreme of some 'everyone has the same amount' communist theory, which is completely false.
John Kennedy said - because it was true then - that 'a rising tide lifts all boats'. But since Reagan, over 90% of the public is flat or worse on income, while the top few get all the massive increases in economic productivity - even as the increases are so large the economy has more than doubled in size, wth nearly all the increase to the top 1% - and nearly all of it to the small fraction of the top of that 1%.
But what's happened is a political/propaganda effort to get people not to oppose this, but to support it.
The Koch brothers - since the 1970's advocates of a radical libertarianism in the US - saw their wealth grow in recent years from $7 billion to well over $50 billion - giving them plenty of money to buy this change in the US public opinion as they fund hundreds of radical right people and groups. For just one example - the far right Scott Walker, viewed as a 2016 presidential possibility, didn't grow organically in Wisconsin politics - his biggest donor was the Kochs.
I've broadened from the example of US corn in Mexico and free market economics, because of how the same problem can happen and is happening to much of the US.
What are the solutions of the free market advocates to the needs of the American people? Impractical platitudes - the poor are to blame, not the policies. And like any propaganda there's a nugget of truth - the poor are not perfect, but as propaganda, it exaggerates that nugget into a lie to hide the larger issues.
Democracy is supposed to be about the people being able to use the vote to recognize these things and pass policies for the good of the people - things like progressive taxes and investments in public education and healthcare. 'Free Market Economics' happen to align with the interest of the very wealthy in creasing their wealth despite the great harm to the rest of society - putting it directly at odds with the democratic principles and goals for society to be better for everyone, not a few at the expense of everyone else.
This is a matter of degree - democracy is happy for some to have a lot more than others - it's the unproductive extremes where it's a problem, oligarchy, where the government is controlled by a few, where the economy is less productive to protect the wealthy and wealth is concentrated to such an extreme as to hurt the rest of society greatly.
Modest inequality of wealth increases productivity; extreme concentration reduces it, and there's that pesky question about how well it's distributed.
Free Market is a simple phrase, easy for people to sign up for, equating the nice word 'freedom' with the word 'free' in 'free market', implying that anything else is some evil communist approach that will 'make everyone equally poor', which is nonsense but effective propaganda. It becomes a religion and cult for many. All they ask about a policy is, 'is it free market?' Nothing else matters to them. And that's a way to have disastrous policies, instead of the 'good governence' that addresses people's and society's actual needs.
When progressives saw the opportunity that educating the public would be a win win increasing economic productivity and enriching citizens, they invested in an explosion of public education in the country - which often meant early on free public education, paid for by the taxes of the people when employed later. And it worked. But 'conservative' ideology, 'free market' ideology, chipped away until, under Reagan as Governor, California was the last state to end the 'free' part - and in the continued 'free market' growth, well intended policies for student aid have been exploited by a largely worthless for-profit explosion in private colleges that are very good at spending big bucks to recruit students, get all the government money for their education, and spit them out without an education but with lots of debt, pocketing vast sums along the way - a system defended by 'conservatives' who are convinced that the private schools just have to be better simply because they're private, ignoring all the facts, data, studies showing what a massive scam it is - with their solution if they have to address it not being to fix the corruption, but reduce the financial aid.
Bottom line - 'free market' ideology has some limited use to increase productivity, but unless balanced by a democratic culture protecting the people, will lead to oligarchy.
Free market economics is not in any way an effective system of governing a society or protecting the interests of the citizens.
What does it offer to the million Mexican farmers driven to flee their home in desperation?
Nothing but starvation, lack of medical care, poverty, prison, deportation, misery and a scolding to do something more productive, it's their fault.
Sometimes, some inefficiency has some benefits. When a Wal-Mart comes to town, and puts all the surrounding small businesses out of business, it legitimately lowers the cost of goods - yet replaces more middle class employment with low-wage Wal-Mart employment if they're lucky, while taking enough money out of the local economy that used to stay in it to pay massive profits to the corporation, including the wealthiest family in the world. Maybe that local economy is better off with some inefficient small businesses and keeping wealth.
Maybe Mexico is better off with higher corn prices and the million farmers employed.
And maybe not - but the way that should be decided is by democratic leaders, not a blind ideology dedicated only to narrow economic growth and not concerned with the people.
There are often 'hidden' interests at work in these things - for example, everyone will say they're for all Americans doing better, but in the short term, the poorer the people are, the cheaper the labor costs for the wealth - putting them at direct odds with the prosperity of the people, something they'll never admit, but will fight hard for.
Free market economics should be viewed not as some American principle, but rather as a tool that can be useful carefully applied, but is a great menace to society when excessive.
Instead, today, more than anything in our political culture it's a cult with followers not understanding they're hurting their own well being.
Earlier I mentioned Nobel Laureates - even radical free market supporters like Milton Friedman - whose economic theories were followed to disaster in the laboratory of Chile under Pinochet - recognized this issue enough that he advocated a 'universal minimum income' for everyone in an attempt to counter the great harm to people of the policies - a policy soundly renounced by today's right. Even Reagan - a Friedman supporter - backed this supporting the 'earned income tax credit', also an issue for today's right.
But that just shows they had some understanding how the policies were lacking - the solutions were not enough.
What HAS worked well is Keynesian economics - leading to great American growth, when that 'rising tide lifted all boats', to the point that even when Democratic governance ended with Nixon, Nixon still said, 'we're all Keynesians now', because the policies had been so proven.
But that was before the war to replace them with 'free market economics' and decades of shifting wealth to the rich and everyone else no longer getting a share of growth.
