The next time some pious politician parrots cliches about the glories of ‘the free market,’ you may want to respond with some of the points former Secretary of Labor Robert Reich makes in his HuffPo post, “The Myth of the ‘Free Market’ and How to Make the Economy Work for Us“. As Reich sets the stage:
One of the most deceptive ideas continuously sounded by the Right (and its fathomless think tanks and media outlets) is that the “free market” is natural and inevitable, existing outside and beyond government…And whatever ways we might seek to reduce inequality or insecurity — to make the economy work for us — are unwarranted constraints on the market’s freedom, and will inevitably go wrong.
By this view, if some people aren’t paid enough to live on, the market has determined they aren’t worth enough. If others rake in billions, they must be worth it. If millions of Americans remain unemployed or their paychecks are shrinking or they work two or three part-time jobs with no idea what they’ll earn next month or next week, that’s too bad; it’s just the outcome of the market.
According to this logic, government shouldn’t intrude through minimum wages, high taxes on top earners, public spending to get people back to work, regulations on business, or anything else, because the “free market” knows best.
Such is the pablum Americans are spoon-fed from childhood on. But Reich takes an interesting angle on the term:
In reality, the “free market” is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what’s private and what’s public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on.
These rules don’t exist in nature; they are human creations. Governments don’t “intrude” on free markets; governments organize and maintain them. Markets aren’t “free” of rules; the rules define them.
Reich adds that “If our democracy was working as it should, presumably our elected representatives, agency heads, and courts would be making the rules roughly according to what most of us want the rules to be.” In reality, however,
Instead, the rules are being made mainly by those with the power and resources to buy the politicians, regulatory heads, and even the courts (and the lawyers who appear before them). As income and wealth have concentrated at the top, so has political clout. And the most important clout is determining the rules of the game…Not incidentally, these are the same people who want you and most others to believe in the fiction of an immutable “free market.”
Reich’s take on ‘free market’ mythology is something all good social studies teachers should use to challenge their students, starting in jr. high/middle school. As it is, most young people are not exposed to anything that challenges free market mythology until/if they get to college, if then. Educators who are serious about teaching critical thinking should put Reich’s essay at the top of their reading lists.