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Free Market Myths

The Myth of “The Free Market” is like the collective agreement on the internet that Kanye West’s Yeezus and Grimes’ Visions are good albums. There’s rarely room for debate or disagreement, because, well, that’s just how it is in our society. Herd life can be boring at its best, dangerous at its worst. There isn’t a day that goes by where I don’t read some kind of middle-class capitalist rhetoric stating that “if only the market was completely free from government distortions, then…”. You can fill the rest in with whatever economic or social policy needs to be saved from the state if you’d like, but then you would become something that even Karl Marx abhorred. A utopian.

The utopian dream of the free market is nothing but the sigh of the petite bourgeois after coming home from work, sitting on the couch, and turning the television on to such channels that glorify haute bourgeois status. Of course, as with statistical analysis, there is some measure of error. I’m well aware that not everyone will fall into this niche, but hear me out anyway.

In Ha-Joon Chang’s book 23 Things They Don’t Tell You About Capitalism he writes:

The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone.

Take, for example, a committee formed by the American Medical Association called the Specialty Society Relative Value Scale Update Committee. RUC for short. This cartel of doctors sets the price of every single medical practice and procedure you can think of from a basic wellness visit to a cardiac stint. The prices are then used to determine what government services like Medicare and Medicaid can be billed for which is a big determining factor on what health insurance policy owners will pay as well. “Special Deal” is a piece in Washington Monthly in which some light is shed on to the mostly unknown cabal of primary and specialty care doctors jockeying for position to get a bigger piece of the tax-payer money pie. They are, in other words, setting their own salary. So if you wonder like I do why health insurance costs so much here in the US this is a good place to start.

If this sounds familiar it is, it’s what worker’s unions do. They negotiate their wages and benefits collectively while management sits on the other side of the table trying their best not to cede too much power. Every day I read something new online about union bashing; how unions are the root cause of so much middle-class labor woes, though this Marxist doth protest. People on the right, whether they be Republican or Libertarian-Populists, are fighting the wrong kind of battle if all they’re arguing about is how unions take jobs away from people. No, they don’t. In fact states with Right To Work laws have lower wages and benefits and have . This right-wing plank has been used to chip away at worker’s rights for 30 years and has led us to the point we are now at in our economy. But, if you take them at their word that unions are a market distortion then surely you can’t be serious when looking at the bigger picture. There are problems at hand that class/political divisions must come together to solve.

We will never have a completely free market. The market system itself constantly needs governments to prop it up. For that reason, as a Marxist, I am very critical of capitalism. I will end with this quote by David Graeber from his book Debt: The First 5,000 Years:

This is a great trap of the twentieth century: on one side is the logic of the market, where we like to imagine we all start out as individuals who don’t owe each other anything. On the other is the logic of the state, where we all begin with a debt we can never truly pay. We are constantly told that they are opposites, and that between them they contain the only real human possibilities. But it’s a false dichotomy. States created markets. Markets require states. Neither could continue without the other, at least, in anything like the forms we would recognize today.

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There Is No “Scandal” Except For The Capitalist One

Everyone knows that our two-party political system doesn’t really provide anyone with a real choice. Aside for some social policy differences both Democrats and Republicans are two heads on the same capitalist body working to keep a system in place that rewards criminal activity.

However, we must recognize that because of the bickering amongst the bourgeois, the working class and people who are genuinely trying to help one another out are the ones that suffer.

Take, for instance, the IRS “scandal” that seems to be making its way through the mainstream media as being some kind of tyranny against the right-wing brought by the Obama administration. Far be it from me to exclude any president (past or present) from scrutiny when it is called for, but the evidence is pretty clear that people, once more, are mistaking fiction for fact.

David Johnson points out in a blog post that after the Citizens United ruling the IRS was flooded with applications for a special tax-exempt status only awarded to “social welfare” groups not “political activist” groups. Things called FACTS are given:

Fact: Only one-third of the groups that were passed to specialists for a closer look were “conservative.” Lots of other organizations were also checked, including progressive organizations.

Progressive organizations you say? How come we don’t hear about those in the news?

Fact: No groups were audited or harassed or “targeted” or “singled out.” This was about applications for special tax status being forwarded to specialists for a closer look to see if they were engaged in political activity that would disqualify them for the special tax status. This closer look is the kind of review all organization should get, but the IRS was swamped because of the flood of groups applying for a status that let them mask their donors, after Citizens United.

Ah, yes. Citizens United. Money equals speech so therefore the owners of more capital can speak the loudest.

Fact: The only groups actually denied special tax status were progressive groups, not conservative groups. In 2011, during the period that “conservative groups were targeted” the New York Times carried the story, 3 Groups Denied Break by I.R.S. Are Named . The three groups? Drum roll … “The I.R.S. denied tax exemption to the groups — Emerge Nevada, Emerge Maine and Emerge Massachusetts — because, the agency wrote in denial letters, they were set up specifically to cultivate Democratic candidates.”

So wait, the groups that were “targeted” weren’t even denied, yet the Democratic ones were? I don’t see or hear conservatives on the television or radio weeping crocodile tears for them, just for their own. Keep in mind that mid-term elections are swiftly approaching.

Johnson also points to a post by Peter Daou where he explains how the Democratic party has ignored and forgotten about the left, forcing politics to the right, and dragging corporate media along with it. Chris Hedges has written extensively on this.

In the end it’s just one head trying to gnaw away at the other in an attempt to gain control of the entire body. It takes our attention away from the real problems of our government. For instance, how it maintains a global empire through the “war on terror” and transfers wealth and income from the working class to the upper class through the establishment of supply-side economic policies.

No More Masters

So every four years people vote for a president here in America. And every four years I make a bet that I won’t hear at least one person say “If you don’t vote you have no reason to complain.”

I owe myself $5. No big deal.

While the noise will sound the same the action will eventually be different. Hopefully in the next four years I will be out of the state of Florida so I won’t have to worry about swing-state electoral politics. I’ll hopefully be somewhere else in grad school arguing with a libertarian over something Mises or Friedman said. However, no matter where I end up I honestly don’t know if I will ever vote again. It’s become voting for Capitalist A or Capitalist B, Crony 1 or Crony2, and all within the Corporate Plutocrat Infinitum.

I would like all of you to remember a few things that have to do with some basic economic ideas turned upside down by both Republicans and Democrats.

1. The Hayekian experiment of “setting the market free” failed miserably. The rationality of people in the upper echelons of society (public and private) turned irrational through the gorging on the bets against toxic mortgage-backed securities. We can thank Clinton, a Republican led Congress, and the idea that merging depository banks with investment banks was a great idea for that miscue of “small government” and “free-market” principles.

2. Keynesian-type spending on the military industrial complex, the war on drugs, and an ever-reaching police state has dragged our deficits even deeper than they should be. This was the type of spending Keynes did not envision or use to promote “full employment”. It does however promote fear, hate, and an ever-reaching hand of the corporate state into our lives.

I’m not going to go any further into a diatribe supporting a candidate. Honestly, I don’t care for either of them because I don’t support their version of capitalism or governing. I’m standing at the line where I don’t know if I support capitalism at all – cuddly or otherwise.

I know why the left (center) settles for Obama, he’s not Mitt. And I know why people love Mitt, he’s not Obama. But they both share the same governing policies here and abroad as well as economic ones, it’s just that one prefers equality of outcome a little bit more rather than opportunity. But when the day is done does anyone really see a difference? In either case the bourgeois still win. It’s corporate socialism coupled with a nanny state that ensures the rule of the 1% over the serfs. In this case, Hayek was right. We have lost many freedoms. Economic and otherwise.

The solution isn’t just to vote, because what does that do except keep the status quo. What it takes is direct action outside of the booth and there are many ways to do this even if you’re incapable of going to protests, meetings, etc. At the end of the day everyone has a right to complain about what happens because we all live here whether we vote or not.

How un(American)

As I prowl the internet I come across a great many sites that argue over the fact that we do not have more presidential candidates participating in the debates. That it’s “unAmerican” that Ron Paul, or Gary Johnson, or whomever is running on a specific ticket is not allowed to debate with capitalist choice A or capitalist choice B (psst…that’s Obama and Romney) on live television in front of the rest of our country.

I hate to break it to those red, white, and true blue believers, but that isn’t just an American value, that’s a democratic one that isn’t specific our country. We didn’t invent democracy, though many on either side of the political spectrum still considers it an invention of our revolution and subsequent union. But even that kind of democracy – and the one we struggle with today – is a limited one.

We seem to be in the stranglehold of the fist of capital, or wealth, or debt – whichever one you choose really because these days they are all the same in the eyes of the working class. Our capital has been shifted upwards through crony capitalism and corporate socialism. Our wealth (social, emotional, physical) has in most cases been depleted through the longer hours we work for the smaller piece of the pie. And our debt is the only thing handed back down to us as a means to survive while banks make sure we’re locked in to feed them like the good hosts for parasites we’ve become.

It’s nothing new in the eyes of Generation X, Y, or Z. All the lines on the graph of life have been skewing downward for the past 20-30 years no matter where the plot started. That is except for the ruling class who have begun to take notice of the people becoming a bit…upset.

More people have started waking up and realizing that the promise of being affluent like everyone else was a farce. There is no American dream because as George Carlin once said “you have to be asleep to believe it.” But we aren’t totally screwed because we’re only as powerful as we are conscious and active in our political, social, and economic surroundings. And these days there isn’t any shortage of that.

Sure, vote for your favorite candidate come election day, but also take notice of what’s happening around you after you leave the booth. Take notice and be inspired by the teacher strikes in Chicago (they weren’t just striking for more pay), or the recent Walmart ones (they are striking for more pay because their current wage is a joke). Follow economists like Dean Baker, Richard Wolff, and Steve Keen. They all have great ideas and solutions to help get us out of this hole. And above all else, get involved locally. The only way we can have our democracy back is not by waiting for some man or woman to appear on television to speak to us, we need to speak to each other.

Opening Scene

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I found this little morsel after typing in “heterodox economics” in a Google image search so I figured it would make for a good welcome message from yours truly. However, I will admit with all due respect and sincerity that I did not choose to become an economist for the $$$$$$$$$$$. I wanted to become an economist to study $$$$$$$$$$$$ and the whys, whats, and hows behind those green slips of paper and to use that knowledge to help and take part in the radical and leftist school of thought in my country of birth. The U.S. hasn’t been too terribly kind to the left over the years but with the financial collapse of 2008 people from all walks of life are interested in hearing some new ideas on how we can put wealth back into the people’s hands.

When I say people I mean you and me. Not the big businesses that live on government welfare. And not the crony government types that love to tax and give our money to those big businesses. I want to see businesses succeed, but not at the cost of other people’s failure and repression. This is the main reason why I am very critical of the capitalism we experience in today’s society. I’m not sure to what extent it can be abolished or even reshaped, but that’s why I am here. I want to find out.

We need a new society with a new economic system. One that works for everyone and not ruled by an elite few. When Occupy started in 2011 it was a step in the right direction to bring to light problems that had be festering in our institutions that became the new normal of American capitalism. Occupy also did something else; It gave me a new outlook on life and inspired me to go back to school to study economics and help fight against the people who caused not only the financial crisis but all the other crises connected to our joke of an economic system.

During my studies I will be posting personal thoughts, ideas, and links to other people’s posts I find that can help everyone learn more about the alternatives to America’s capitalism to form a new economy. I will do my best to keep up with it during my busy schedule that includes working full-time, going to school full-time, and helping to raise two daughters. It is for them and for you that I am doing this.

 

Welcome to radical rationale.