For decades we have been told the idea that an unregulated free market is the best solution for “everything”, and that the common rule of “demand & supply” is applicable everywhere and is in fact the “only” regulation necessary…
Well – it doesn’t take a skilled scientist to find out that although a free market definitely has its advantages compared to other systems – Greed and hunger for economic Profits and Power “might have” distorted the basics to such extent that one could really argue whether a “truly free” market exists anywhere, and whether it is compatible with a finite environment – One planet.
…could it even be so that “priviliged people and corporations” have changed the meaning of the term “free market” so that it today means freedom to do anything that can bring financial gain…
Let’s take a look at what the Free in “free market” could be a associated with:
Free from “Real Value”…
Almost all currencies on this planet are “FIAT-currencies” without a fixed connection to “intrinsic real value” – They are not backed by the value of any physical quantity, only by the “promise” from the government in the country where it is issued, that it holds a certain amount of value(?)
This is an effect of the “Nixon Shock” on august 15th 1971, when Richard Nixon unilaterally declared that the fixed link between the dollar and the gold was removed. (Read more in a previous article – here)
…sounds “good” – then if the market needs more money, we just “print” more money – a promise to pay back at some point in the distant future can be made at almost any amount… if we are really “smart” we promise and print so much money that there never will be any shortage, and since there is no longer any relation to real value we can have a financial wealth far bigger than the real value in real assets… there will probably not be any risk that the “abundant” financial wealth could be “accumulated” by a few and then be used to buy real assets and excessive consumption at a rate higher than our planet can supply or “renew”…?
Free from “Debt”…
For more than 30 years economists have been using macro-economic models that doesn’t include “debt” or “banks”. One of the most influential Economist within the current neo-classical economic theories, Nobel prize winner Robert Lucas, stated that “a debt is always matched by a credit, and can therefore be excluded from the model” and made it seem as simple as when you take out two equal variables from any mathematical equation if they appear on both side of the “equal to” sign…
(Read more in a previous article – here)
…a while back, I read in a report from “ING”, that the total debt, Governmental and Private, has increased dramatically in the world, and is today a total equivalent to >313 percent of the global GDP – but it’s all according to “the current model”, and with an infinitely growing economy there should not be any issues paying interest… But what if we should pay attention to the IPCC and keep 80% of the fossil fuels in the ground to avoid an overheating planet, stranding $20 Trillion in fossil fuel assets… or going the other way around facing enormous costs to mitigate Climate change consequences – can we afford that and at the same time pay interests and mortgages on the debt we have accrued so far to achieve our current lifestyle…?
Free from “Tax”…
Today big Corporations employ thousands of lawyers and tax-specialists, creating schemes and structures that are designated to achieve “Zero-taxation” for the benefit of their shareholders. Tax-havens and offshore financial centres are so commonly known and used that they are defined in our dictionaries… some praxis’s are so commonly used that they become idioms such as
– “Double Irish With A Dutch Sandwich”.
Executives like Google’s chairman, Eric Schmidt, can openly declare that – he is “proud” of the way his company avoids paying taxes. “It’s called capitalism; We are proudly capitalistic. I’m not confused about this.” – and still expect to be seen as “respectable” while “avoiding” their responsibility, legal or ethical, and continue business-as-usual… (Read more in a previous article – here)
…wouldn’t it be fantastic if nobody had to pay taxes, if things like healthcare, education, infrastructure, defence-systems, police and all that stuff that we as a society have agreed to share costs for and benefits from because that’s what a society is all about, taking care of its citizens, if it just sort of “appeared” and was free of charge – well, become a corporation, and you can do just that – enjoy the benefits and profits of operating in the society and escape the costs… [sarcasm]
Free from “Personal Responsibility”…
When one of the leaders of the Chicago school of economics, and principal proponent of “free market economy”, Milton Friedman wrote an article in New York Times, 1970 he stated that:
“…Only ‘people’ have responsibilities…’Business’ as a whole cannot be said to have responsibilities, even in this vague sense’…”
This corporate discharge from “societal responsibility” led to development of all kinds of setups where corporations operate only as legal “entities” creating their own flawed game rules based on theories derived from Taylor, Keynes and Friedman. It also divorced people’s attachment and motivation from the “Corporate Machine” and placed them in a separate category of “commodities” – Human Resources – “an identifiable non-monetary asset without physical substance”. (Read more in a previous article – here)
…maybe we should all individually become “non-responsible” corporations like some kind of “avatars” – in that way nobody have to be responsible for their actions… what a “fantastic” evolution of our society that would bring… [sarcasm]
Free from “Democracy”…
The way the “free market” concept has evolved, have eventually brought it very far from democracy and “one person = one vote” – instead the concept is “Money Talks” and “one dollar = one vote”.
In fact the evolution have come so far that it even starts to claim that profits should be more important than democratic processes…
When reading some of the articles and leaked texts from the ongoing “secret” negotiations on a new Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), there are proposed clauses in these trade agreements that would allow corporations to go after governments before foreign tribunals to demand compensations for environment protections that they claim would undermine their expected future profits…
Isn’t this outrageous – should Corporate “expected future profits” rank higher than democratic developed social systems and laws…?
…what will be the next move – should Corporate wishes also rank higher than the UN declaration of human rights… and what about constitutions – should corporate “expected future profits” also be higher ranked than the constituent Assembly…
Reflection
Recently I read the World Economic Forum (WEF) Global Risks Report 2014 – it is “a little worrying” that so many of the “above average” risks both when it comes to Likelihood and Impact are related to either Climate change issues or Inequality issues – and yet so little change can be detected in the way the corporate landscape and the “free market” evolves. In fact, if you look at some of the aspects above “Business as usual” is still, “by far”, the most dominant trend.
If you look a little deeper in the report section on “The Evolving Global Risks Landscape (2007-2014)” you will also find that quite a few of these risks have been “high ranked” for at least half a decade…
Figure 1.1: The Global Risks Landscape 2014 (WEF-Report)
I don’t know where we are headed, but I know one thing for sure:
We are all living on this One planet, it’s the only one we have, it has limitations that we cannot afford to break – our lives and the lives of future generations depend on it.
If the free market continue to evolve in the “somewhat rogue and reckless” direction it in many ways seems to be headed, none of us will have a choice.
…I am basically pro a free market, but I am even more pro Society, so if there ever have to be a choice – I will choose Society…
Once Broken, planetary boundaries cannot be fixed by money…