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Market
Delusions
If
I could make the president read just one book right now, it
would be the one I just finished: Predator State: How Conservatives
Abandoned the Free Market, and Why Liberals Should Too,
by James K. Galbraith. I would consider sacrificing a finger
to get him to read it and take it seriously.
Now, before you get your panties in a bunch about the delightfully
inflammatory subtitle, Galbraith is no revolutionary. He’s
an economist, and a fairly traditional one really; he has
no interest in getting rid of markets. He’s well aware of
what they’re good for and the situations in which they work.
He can explain the failures of Soviet Communism with the best
of them. In fact, he’s not even particularly interested in
getting rid of (or even harshing on) large corporations per
se, or even NAFTA. He’s probably to the political right of
many folks who opine in these pages.
But what he does do, in conscientious real-world economic
detail, is explain what the Reagan revolution did, why it
didn’t work, and how its principles are inconsistent internally,
even if you accept its stated goals. This in and of itself
is heady stuff.
Then he talks about the rise of a predatory CEO class whose
interests, thanks to various changes in our financial structure,
became divorced from the interests of their businesses and
became more identified with each other. These predators decided
it was easier to take over government for their own benefit
than to continue to improve the competitiveness and advance
the technology of their industries (which is what happens
when lazy responses like outsourcing and deregulation aren’t
open). The following is as good a summary of the Bush II years
as I’ve heard: “In the corporate republic that presides over
the Predator State, nothing is done for the common good. Indeed,
the men in charge do not recognize that public purposes exist.
For this reason, the concept of competence has no relevance:
to be incompetent, you must at least be trying.”
Galbraith then bravely explains how to get our country on
track again: planning and standards (i.e. regulation)—otherwise
known as the Scandinavian model. Which has the benefit of,
well, working.
Galbraith challenged a number of things about how I thought
the world worked, from trade agreements to China, which tends
to be a good sign for me in a book.
But he’s still left me with one fundamental dilemma that he
describes exquisitely, and doesn’t answer: Every politician
in this country, bar none, feels the need to kneel publicly
at the altar of completely free markets and free trade (even
though neither exist and can’t exist)—conservatives and liberals
only differ in terms of whether they say that markets sometimes
need “help” around the edges or not. How do we change the
conversation?
If the cold hard facts are that the market doesn’t function
for health care (leaving aside the occasional second opinion,
you don’t choose your treatments or drugs or appointment schedules
the way you choose a car or a DVD player, nor should you),
why are we even entertaining the idea of health care reform
solutions that “make the market function better” or leave
the predatory health insurance companies in place, who do
absolutely nothing but drive costs up (again, this from the
basic models of economics)?
If the fact is that regulation of wages, health and safety,
etc. are what create the climate for competitive business
improvement, not destroy it, how can we make it not a dirty
word?
If it’s become super abundantly clear that financial markets
cannot police themselves, let alone other businesses, how
do we stop pussy-footing around the need to police them?
Because sadly, I can’t summarize Galbraith’s painstaking economic
explanations in one column. In fact, I’m going to have to
read the book a few more times in order to be able to summarize
them in conversation. And if I could, it’s hard to imagine
it being enough to get through the simplistic markets-good,
government-at-best-necessary-evil that perversely has practically
become part of the American national identity.
But it needs to be done somehow.
I believe the current administration does believe in
public purpose, and is not merely a set of flunkies for a
lazy CEO class. And yet, if they can’t challenge this all-pervasive
assumption that here in America we don’t do these things—don’t
plan, don’t regulate, don’t insult the good name of unrestrained
monopolistic capitalism—or if someone else can’t make them
challenge it, I fear the failure to recover from our current
economic woes is going to be, in a word, spectacular.
—Miriam
Axel-Lute
www.mjoy.org
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