Why the Idea of a "Free Market" Is Total BS

From AlterNet, former Labor Secretary Robert Reich calls out the Emperor for his nudity:

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.

And

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.

More here.

Of course, actual economists will readily admit that there is ultimately no way to separate the government from the market, and that such a thing would, in the abstract, be a really bad idea, but they will be happy to tell you where in the market the government ought to be stronger and where it ought to be weaker.  But that's another discussion.  And I really do mean "another discussion" because that's not the discussion we have in the public discourse.  In fact, the public discourse for over a decade has been very much in terms established by conservative god and former president, Ronald Reagan.

That is, in virtually all economic discussion, by Republican or Democrat, politician and pundit alike, there is an ongoing assumption that "government is the problem."  Sure, the Democrats do continue to push to some extent what the conservatives would these days call "socialism," but they're really timid about it, clearly afraid to do "too much" because, you know, government is the problem.  Remember Obama's patronizing dismissal of single payer health care because of our free market "tradition"?  That doesn't even make sense, but it does show where the Democrats are on how government ought to interact with the market: it's best to err on the side of business--so err is what they do, again and again.  And the Republicans, don't even get me started.  To them, ALL government interaction with the market is treason.  Unless it's the military/industrial complex.  Otherwise, total obstinacy.

In short, "government is the problem" may very well not have anything to do with any serious thinking, but it has totally captured the ruling establishment's entire understanding of economics.  It's a religion, as self-contradictory and impossibly magical as any religion you care to criticize.  That's why the government's ongoing efforts to pull us out of alternating stagnation and recession all look like primitive witch doctors performing exorcisms.

That is, our leaders have absolutely no idea what they're doing.

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