So what's in a word or phrase? Why spend three days pecking away at the phrase "free markets?"
The answers are "a lot" and "because freedom matters to Americans." Indeed freedom and liberty may be the preeminent American Value, two of the first words that come to mind when we think about what defines our nation. "Land of the free." "Liberty and justice for all." Most of us think freedom is a good thing.
But we've also been quietly trained to think of freedom and liberty in material and economic terms. And that's a bad thing.
More below the fold....
'Free' Markets, Part III - A Different Narrative (Non-Cynical Saturday)
This week Morning Feature has considered a claim often made by conservatives and libertarians: "free markets" are good, government is at best a necessary evil and usually not necessary because the "smart money" in the markets will solve problems if left alone. But truly "free markets" don't exist. Thursday we saw that unregulated markets concentrate under giant corporations, because "money is stupid." Yesterday we saw how corporate giants rely on government support, because "money is a coward."
Today we'll see that we can be better than stupid and cowardly, but to do that we must break some links in a chain that binds us to an unsustainable worldview. Our founding documents spoke of ideas like "all men are created equal" and "We the People," yet those phrases have more honored in the breach than in our national practice. Historian William Appleman Williams suggested we were able to get away with that by expanding: new territory, new markets, new technologies.
In modern parlance, the solution to some having a huge slice of the pie while others had only crumbs was to make a bigger pie. Those with huge slices would still have huge slices, but the crumbs would be bigger as well. Empire, Williams wrote, "was the only way to honor avarice and morality. The only way to be good and wealthy." It's an optimistic win-win solution, except for those into whose territory or markets we intrude, or for the ecosystem our technology might threaten. But what if the pie can't get much bigger?
Capitalism requires growth.
The central premise of capitalism is that whose who have wealth invest with the expectation of a profit. Efficient markets and rational economic actors yield optimal production and distribution of goods and services through the self-emergent system of self-seeking individuals guided by the "invisible hand." The purest proponents argue that government action distorts the market, upsetting the self-emergent system, and they usually point to Soviet Russia as the archetypal example of why government must not interfere with the market.
The expectation of living off the profit from invested wealth relies on economic growth. The seed of investment must yield a large enough crop to feed not only those working the field, but the seed-providing investor as well. That surplus happens readily in frontier sectors: the development of new territories, markets, and technologies. It's not so likely in an established sector, where the land is crowded, the market is saturated, or the technology stable enough to that once-breakthrough ideas are now industry standard. Established sectors often yield too little surplus to both feed those working the field and the seed-providing investor.
Monetized Liberty.
As Williams noted, for most of our history, the U.S. was a series of frontiers: westward expansion, untapped resources, new markets overseas, and new technologies. There were enough frontiers that the pie could keep getting bigger fast enough to tamp down most resentment among those who got only crumbs. They could move into a new frontier and perhaps gain a bigger slice of pie there. If not, at least their crumbs were bigger than the crumbs their parents had.
Capitalism seemed to be a natural fit for democratic government, so much so that we began to merge the words we used to talk about them. Phrases like "free markets" and "economic liberty" both reflect and reinforce the link, because language seems to shape our thinking. That idea goes back to the Whorf Hypothesis, which while over-broad and under-researched has been refined into the modern science of cognitive linguistics, with pioneers like Drs. George Lakoff and Drew Westen.
If you consistently hear words like "free" and "liberty" next to words like "markets" and "economy," they become linked frames. Stated most bluntly - and imprecisely - you begin to think Freedom = Money. Worse, you probably won't know it. When those frames get merged, your intuition - invisible reasoning - leads you to favor messages that equate freedom or liberty with money or material possessions. You won't question TV ads that talks about your "right" to choose between a hamburger and a fish sandwich, or "freedom" to drive a particular car on an open road.
You may not even question politicians who talk about "fighting for our freedom" when they plainly mean access to someone else's resources or labor. After all, access to those resources or labor means you can buy more stuff more cheaply, and if Freedom = Money....
Equality and Happiness.
As we saw two weeks ago, there is empirical evidence showing that societies with greater income equality are healthier, safer, and offer more social mobility. Ask people in those more income-equal societies if they feel "free," and most say they do. But they will talk about freedom very differently: they worry less about the cost of getting sick, are less fearful of neighbors, and have fewer of their citizens in prison. That's more like the society I'd like to live in.
The language of Monetized Liberty, such as "free markets," works against our getting there. It trains us to equate freedom and liberty with money and material possessions. It tells us to demand an ever-increasing pie, and if we have to accept ever-larger and more powerful corporate giants, create more millionaires while we have the highest unemployment since the Great Depression, or even go to war to make that pie bigger ... well, that's the cost of freedom, right?
Wrong.
Money Is Stupid, Money Is A Coward, and "free markets" is not only a myth but a propaganda buzzword. Changing the words and phrases we use changes how we think. And we'll have to change how we think to be receptive to a healthier, happier, saner society.
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Happy Saturday!