Republican Market Myth

Channeling Polanyi

Aligning the Republican Party and conservative voters against socialism, communism, immigration and other prejudices resulted in their loss of Presidential elections of 2008 and 2012, and they will lose again in 2016.  The Republican agenda relies on conservative traditions from the 20th Century to support a utopian self-regulating, market driven society.  However, a growing social movement aligned with local government action in the 21st Century will shift the balance of power away from the market economy and benefiting an oligarchy, toward an improved social order benefiting the survivors.

On one side we have the movement of laissez faire — the efforts by a variety of groups to expand the scope and influence of self-regulating markets. On the other side has been the movement of protection — the initiatives, again by a wide range of social actors, to insulate the fabric of social life from the destructive impact of market pressures.

The market assumes land, labor and money are commodities with a price, with measured levels of supply and demand, in a self-regulated market.  This utopian model of an economy has never existed and never will exist.  The core contradiction of a market driven society is that a system of self-regulating markets cannot possibly be a foundation for social order. Government action is required to produce and maintain economic and social order.  The vision of a self-regulating market system is utopian — literally impossible.

Capitalism is an economic system based on private ownership of the means of production and their operation for profit. The key ingredients are private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets.  Left alone without government intervention, a capitalist economic system preys on land, labor and money to extract the last ounce of profit without regard to any other consequences.  Thus parasitic capitalism has no balancing feedback loop to maintain stability and will destroy the host.

In a self-regulated market, products and services fit the economic theories. The fictitious commodities of land, labor and money are the achilles heel of the market economy.  There is limited land and underground resources that can be extracted without causing environmental harm to the general population. People have other demands on their time besides working for wages and must be protected from exploitation. Money is managed by a government agency.

The self-regulated market is based on fictitious commodities of land, labor and money in a way that benefits oligarchy.  The slow, certain destruction of stable governments by the self-regulated market also destroys the natural environment.

By signing global trade agreements, like NAFTA and TPP, America has tilted policies too far in the direction favored by the movement of laissez-faire risks that both weaken the domestic economy and become too dependent on the global economy.  American land, citizens and dollars are not commodities to be bargained away by the self-regulated market.

By 350.org supporting a fossil-fuel divestment movement, they are using the business community’s own weapon against themselves.  The oligarchy will still try to use the threat to withhold investments as a weapon to get politicians to support their laissez-faire market policies. However the market for renewables, electric vehicles, energy efficiency and political support for decarbonization policies continues to grow.

As the 2008-2010 downturn in the economy continues to cause lingering stagnation for large inner cities and rural areas, the protective counter movement gains greater political leverage as more citizens demand protection from economic hardship.  Why is America choosing to put the protection of corporate rights above the protection of the health of human beings who will die an untimely death from pollution?

Economists believe that governments need to help markets work efficiently by enforcing contracts, resolving insolvencies, quickly hooking up firms to the power grid, supporting training and education of the work force, and using many other policies, laws, regulations and rules.  Changes to the way governments help markets work efficiently are known as structural reforms.

Structural reforms include reducing corruption, improving land use laws, improving labor market regulations and managing monetary and fiscal policy.  The economy and government regulation maintain a constant wrestling match trying to balance the myth of a self-regulating market for products and services, with the social stability required for land, people and money to be equitably disturbed across the whole population. Too much exploitation of land causes pollution and reduces the longevity of people.  Too much exploitation of people causes poverty and homelessness.  Too much exploitation of money causes an oligarchy.

Globalization pushes capitalism’s fictitious commodities of land, labor and money to their utopian limits.  As a result, pollution degrades nature, more working poor degrades culture and poverty degrades society.  Finally producing new forms of resistance to the market economy based on financial gain by a few - an oligarchy.

Political movements, in America and globally, struggle to reclaim privately enclosed land, subordinate deregulated labor and financial markets to popular control, and to bring an end to global inequality and underdevelopment.  Global free trade agreements like TPP work against these new movements.

Instead of state regulations challenging the central role of the market in society, they have been used to reinforce the strength of the self-regulated market at the expense of land, people and money.  Exemptions to regulations are granted without public comment, increasing harmful pollution that shorten people’s lives. Only a fully functioning democracy has the power to embed the market into an overall economy embedded within society.

How do we balance the market with the overall needs of society? We must embed the market system into an overall economy that is managed and governed by a democracy with the maximum number of citizens participating in decisions.  This means capitalism must be subordinate to the will of the people.

Sources:
1.  "The Great Transformation" by Karl Polanyi
2.   Article by Margaret Somers and Fred Block
3.   Article about Polanyi's book
4.   Article about Polanyi and summary of ideas
5.   Article by Fred Block about Polanyi 
6.   Interview with Fred Block on Polanyi

More reading that I need to do:
Fred Block and Margaret Somers book about Polanyi