The Capitalist Fetish for "Free" Markets

Markets have never been free in the history of capitalism. Someone always has an advantage, often unfair, and is able to distort the market in their own favor. In modern times with the massive growth of powerful corporations and the tremendous wealth and income concentrated in a small number of hands, markets are even less free and more unfair to most of us. What capitalists, and certainly libertarians, mean by free markets are markets free from government regulation or intervention. We have had a few centuries experience with such markets, and they produce tremendous inequities, health dangers, and frequent periodic crises, which we now call recessions, depressions, or crashes. From unregulated markets, we got child labor, crippling injuries, unsafe commodities, tremendous fraud, and much more.

Effective government regulation is fairly recent and is always accompanied by more prosperity for more people. In the USA, we got the food and drug act to inspect food under Teddy Roosevelt, and we got regulation of banking and more under Franklin Delano Roosevelt during the Great Depression. The Federal Deposit Insurance Corporation insures our bank deposits. Medicare ensures that older people get medical care at a reasonable cost.

Starting around 1980, when Ronald Reagan became president, many regulations began to be rolled back. For example, one of the most important markets is the labor market. Without trade unions, workers are at a tremendous disadvantage vis a vis their large employers, and Reagan was determined to smash unions. Conditions for organizing have continued to deteriorate since then, the unionized labor force has greatly shrunken, and wages have been stagnant for more than four decades. At the same time, good jobs are increasingly exported abroad where wages are lower. We are seeing significant pushback now with teacher's strikes and moves to raise the minimum wage, which is precisely a significant regulation of the labor market just as is banning child labor.

In Western Europe, regulation has been much greater and unions are generally much stronger. So are social benefits such as universal health care, vacations and holidays, maternity and paternity leave, severance pay, and so on. There has been a strong push, which goes back at least to Margaret Thatcher in the UK, to crush unions, remove regulations, and lower living standards. Angry workers who can no longer find decent jobs are voting in ultra-rightists and fascists in the UK, France, Poland, Hungary, and even in Sweden. They are voting against parties which increased their misery, but such parties offer no viable solutions.

Now that we are in the grip of a cataclysmic climate catastrophe, we need even more government regulation of markets, but such regulation is being slashed left and right. It was the Neo-Liberal Democrats under Bill Clinton, for example, who repealed the Glass-Stegal separation of consumer banking from commercial banking. That led directly to the mortgage crisis of 2008. Neo-Conservatives, like Donald Trump, are accelerating deregulation.

There is also a political market in which wealthy donors buy the favors of elected officials. The Supreme Court removed key regulation of that market both by eliminating individual spending limits and by viewing such spending as free speech, even by corporations. The political market is the most unfair of all because those who manipulate it in turn use it to enact laws which tip the scales more in their favor in all the other markets.

For all these reasons, we should fight not for "free" markets but for fair markets in which all participants have the opportunity to gain. Fair markets can only be achieved through government regulation, which can only be achieved through massive and militant grassroots pressure. That is our job.