Playing the 'Free Markets' Canard and the Myth of Self Regulation
Politics / Market Regulation Jan 05, 2012 - 10:00 AM GMTBy: Jesse
ca·nard/kəˈnär(d)/
Noun:
a. An unfounded or false, deliberately misleading story : a fabricated report
b. a groundless rumor or belief.
Anyone who has seriously studied applied macroeconomics knows that crony capitalists hate free markets, with all the fairness and transparency that they imply. Competition is a serious drag on enormous profits and introduces significant uncertainty and risk.
As soon as the game is underway, successful capitalists are constantly pushing the envelope of the rules, seeking to establish rents, monopolies, unfair advantages, and debt traps to snare the bulk of the players and stifle the profit-eroding tendency of real competition.
The 'efficient markets' hypothesis and the denigration of regulation serves to despoil markets of their capacity to create wealth and distribute it in a meritorious fashion.
This is the basis of all aristocracies, which are merely the institutionalisation of privilege. Once they make it they bloody well want to change the rules to hang on to it, and take the risk out of their equation. They foster a culture of two sets of books, two sets of rules, and two systems of justice. They are given over in their personal and professional lives to the benefits of hypocrisy and cheating, with little conscience to restrain them. There is a predatory class that is nationless, without allegiance to anything, any principle, but their own greed and lust for power.
The wealthy, not only by private fraud but also by common laws, do every day pluck and snatch away from the people some part of their daily living. Therefore, when I consider and weigh in my mind these commonwealths which nowadays do flourish, I perceive nothing but a certain conspiracy of rich men in procuring their own commodities under the name and authority of the commonwealth.
They invent and devise all means and crafts, first how to keep safely without fear of losing that which they have unjustly gathered together, and next how to hire and abuse the work and labor of the people for as little money and effort as possible."
Thomas More, Utopia
This failing is not particular to capitalism per se, but to any human system. So why not just dispense with rules and let the market have its way? If the system is so much work to maintain and keep free of corruption, why have any system at all?
THOMAS MORE What would you do? Cut a great road through the law to get after the Devil?
WILLIAM ROPER I'd cut down every law in England to do that!
THOMAS MORE Oh? And when the last law was down, and the Devil turned round on you, where would you hide, Roper, the laws all being flat?
This country's planted thick with laws from coast to coast, man's laws, not God's, and if you cut them down, and you're just the man to do it, do you really think you could stand upright in the winds that would blow then?
Robert Bolt, A Man For All Seasons
Anyone who thinks human systems function naturally well without rules and enforcement has never driven on a modern motorway in rush hour. To support this theory they must believe in the natural goodness and rationality of all people when motivated by self interest, which is the biggest sucker bet in history.
And when crime pays, it becomes prevalent. Bad behaviour that on the whole succeeds drives out the good, making it impractical. This is the lesson of the recent financial crisis.
Good government takes hard work and constant renewal and reform. Human systems do not maintain themselves, and are almost never self-improving, but rather given to entropy, manipulation, and deterioration.
But there are plenty of economists, authors, and editorialists who are willing to say for pay, to talk their own or someone's book, since there is little accountability for promoting quack thoughts, as there are for quack medicines that kill.
Merit works, but Privilege pays. And so the one continually undermines the other unless some restraint is applied. And that is the purpose of society and the law in the service of freedom.
By Jesse
http://jessescrossroadscafe.blogspot.com
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