Tuesday, January 03, 2006


Here are a couple of headlines for those who haven't had the time to study both economics and history:

1. There is no such thing as a "free market."
2. The "middle class" is the creation of government intervention in the marketplace, and won't exist without it (as millions of Americans and Europeans are discovering).
The conservative belief in "free markets" is a bit like the Catholic Church's insistence that the Earth was at the center of the Solar System in the Twelfth Century. It's widely believed by those in power, those who challenge it are branded heretics and ridiculed, and it is wrong

In actual fact, there is no such thing as a "free market." Markets are the creation of government.

Governments provide a stable currency to make markets possible. They provide a legal infrastructure and court systems to enforce the contracts that make markets possible. They provide educated workforces through public education, and those workers show up at their places of business after traveling on public roads, rails, or airways provided by government. Businesses that use the "free market" are protected by police and fire departments provided by government, and send their communications - from phone to fax to internet - over lines that follow public rights-of-way maintained and protected by government

The conservative mantra is "let the market decide." But there is no market independent of government, so what they're really saying is, "Stop corporations from defending workers and building a middle class, and let the corporations decide how much to pay for labor and how to trade." This is, at best, destructive to national and international economies, and, at worst, destructive to democracy itself

Markets are a creation of government, just as corporations exist only by authorization of government.

The middle class is a new invention of liberal democracies, the direct result of governments defining the rules of the game of business. It is, quite simply, an artifact of government regulation of markets and tax laws.

But, conservatives say, government is the problem, not the solution.

Most of the Founders advocated - and all ultimately passed - tariffs to protect domestic industries and workers. Seventy years later, Abraham Lincoln actively stood up for the right for labor to organize, intervening in several strikes to stop corporations and local governments from using hired goon squads to beat and murder strikers

But conservative economics - the return of ancient feudalism - rose up after Lincoln's death and reigned through the Gilded Age, creating both great wealth and a huge population of what today we call the "working poor."

But now the conservatives are back in the driver's seat, and heading us back toward feudalism and serfdom (and possibly another Great Depression).

Only a return to liberal economic policies - a return to We The People again setting and enforcing the rules of the game of business - will reverse this dangerous trend. We've done it before, with tariffs, anti-trust legislation, and worker protections ranging from enforcing the rights of organized labor to restricting American companies' access to cheap foreign labor through visas and tariffs.
The result was the production of something never before seen in history: a strong and vibrant middle class.

1 Comments:

Blogger jakejacobsen said...

Agreed and agreed, Ironically as a conservative I couldn't agree with you more. I think too often people substitute "free market" for some sort of blind Darwinian process. But your right, free markets and government go hand in hand.

Government provides protections to the worker that businesses can't and won't.

It seems to me that the right balance is somewhere right in the middle of conservative and liberal thought. Let the market move with as little restraint as possible without being rapacious and predatory.

It's a difficult balancing act.

Great post!

1:45 PM  

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