There's No Such Thing as a Free Market

AlterNet excerpts from the first chapter of economist Ha-Joon Chang's book 23 Things They Don't Tell you About Capitalism:

Recognizing that the boundaries of the market are ambiguous and cannot be determined in an objective way lets us realize that economics is not a science like physics or chemistry, but a political exercise. Free-market economists may want you to believe that the correct boundaries of the market can be scientifically determined, but this is incorrect. If the boundaries of what you are studying cannot be scientifically determined, what you are doing is not a science.

Thus seen, opposing a new regulation is saying that the status quo, however unjust from some people’s point of view, should not be changed. Saying that an existing regulation should be abolished is saying that the domain of the market should be expanded, which means that those who have money should be given more power in that area, as the market is run on one-dollar-one-vote principle.

So, when free-market economists say that a certain regulation should not be introduced because it would restrict the "freedom" of a certain market, they are merely expressing a political opinion that they reject the rights that are to be defended by the proposed law. Their ideological cloak is to pretend that their politics is not really political, but rather is an objective economic truth, while other people’s politics is political. However, they are as politically motivated as their opponents.

Breaking away from the illusion of market objectivity is the first step toward understanding capitalism.

More here.

Okay, so I've said as much before many times here at Real Art: the market, because it is artificially constructed by government, cannot ever possibly be free from interference in its "freedom." And really, that's pretty obvious when you think about it for, like, two seconds. But what interests me here is Ha-Joon Chang's assertion that all economic decisions are political in nature.

In my life, I've had two face-to-face conversations with neoliberal economists, one at an economics seminar when I was in high school, and the other with my macroeconomics professor at the University of Texas. Both of them said something that disturbed me then, but later grew to outrage me: economists aren't interested in morality; they're just interested in understanding the efficient production and use of goods and services--morals are something for the politicians to wrangle with.

In the same way that journalists fool themselves that there is such a thing as objectivity, even while they and their editors decide what is newsworthy, who to quote, what tone to take, and how many times to report on a given story, so, too, do economists fool themselves into thinking that decisions about who gets what, how much, and in what way, is somehow devoid of moral ramifications. I don't even think I need to explain why this is the case--I mean, when Big Agribusiness starts buying up huge tracts of land in India, and local farmers who have worked that land for generations start to kill themselves because they can't compete, that's a moral ramification of an economic decision, one that makes good sense to everybody in the field because it makes more "efficient" use of resources. As if preserving lives, livelihoods, and ways of life didn't make good sense.

Ha-Joon Chang uses the word "political," but "moral" works just about as well--sure, politics and morality aren't the same thing, but there is a hell of a lot of overlap, so his line of thinking applies either way. The bottom line here is that because our political and economic establishment projects almost god-like powers of wisdom onto the field of economics, the public discourse overwhelmingly tends to treat economists' pronouncements, which are almost always from the point of view of the capital holding class, as written on stone tablets, sort of a morality unto themselves.

Until economists, and the politicians who worship them, start to look at economics as a moral exercise, instead of simply an examination of efficiency, we will continue to be doomed to enduring trillion dollar bailouts, decreasing wages, unemployment, and an ever lower standard of living.

I continue to be amazed by how stupid, craven, and mean our leaders are.

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