Economic fundamentalism

I’m not one to normally write about economic issues. Although I do hold very specific and, as some would say, rather radical economic views, I have noticed a trend in economic thought which mimics the fundamentalism found in religion. I am referring to The Church of the Free Market.

I’ve recently been studying the economic trends of the past 40 years, and found it to be quite enlightening. It gave me a glimpse into the deceitful world of big time economic players (the main one being the economic guru, Milton Friedman), intent on changing the world in their vision.

I started off innocently enough: after the Second World War, the world saw economics as a major player in world politics. It was, in large part, the financial meltdown in the west (as well as the prolonged crisis in post war Germany) that allowed Fascism and Imperialism to become so dangerous. It was now understood proper guidance and monitoring would be necessary to avoid global catastrophe.

At the time, Keynesian economics ruled the day. The ‘invisible hand’ of the free market was seen as nothing more than wishful thinking, and countries began investing heavily in their own infrastructure. With the ability to use tax monies, countries were able to build huge nationalized projects that greatly increased their wealth and security. Everything was going well.

But like any system, it wasn’t perfect. Without the necessary capital, poorer countries were finding it hard to generate enough money to make any nationalized projects a reality. In the wake of their turmoil, the wizards of free market economies allied themselves with military juntas in order to drastically reform the once socialist policies of countries like Chile and Argentina, often relying on torture, kidnapping, and intimidation. The results were dramatic. Where a thriving middle class had once existed, now there were only two classes: the very rich, and the very poor.

The new found wealth of the privileged few convinced many that the world was ready for unfettered free markets again. With every financial crisis in desperate countries, cries for deregulation and privatization followed. The results were dramatic; each country that allowed this unfettered market saw the same results as in Latin America; a huge financial opportunity, all at the cost of the destruction of the middle class.

And now we turn to the bailout in the US. The very laws that used to protect the market against wild speculators were eroded, and the consequences were huge. Wall Street, without any infusion of cash, threatens to crumble under its own bloated weight. The government is offering a huge sum to buy out all bad debts and owed assets, but there is no clear stipulation on how the nearly 1 trillion dollars will be spent.

And just as this is happening, neo-cons are moving quickly to try and pull a fast one on everyone. Former House Majority leader Newt Gingrich wants to try and encourage other neo-cons to repeal the remaining protective laws in Wall Street. He would also like to see the privatization of schools and Social Security.

There is a direct corollary between free market fundamentalists and religiosity. Free market enthusiasts feel that the market is like magic: one only needs to put their trust in it and everything will be fixed. Anytime it crashes and burn, they blame only the fact there are still TOO MANY REGULATIONS and by completely obliterating them, everything will be right again. This is nothing more than unjustified faith in a economic philosophy that has shown itself to be highly flawed and imperfect. The fact that neo-cons are usually deeply religious does not surprise me. Deep denial and delusion are all part of the religious framework they operate under.

I worry this type of fundamentalist thinking is going to cause untold havoc. The same people who demand you believe in only their God want you to also only believe in their economic vision. The fact both of these ideologies cause untold misery is of no importance to them. Simply believing is enough.

Of course it shouldn’t be. We cannot allow ourselves to be continually fooled by their rhetoric. The transparent fact is the current financial crisis is a result of the destruction of laws intended on regulating it. No amount of accountability would change that very fact. The notion that individuals must take more responsibility for their actions ignores the fact it was their intense self interest that led them to this crisis in the first place. Every one of these bankers and business people probably thought they were doing well, and they operated within the confines of the law. To have a revisionist view of this negates the opportunity to learn what happens when so much trust is placed in the free market.

The money that will be paid by the taxpayers, none of whom asked to be burdened with such a cost, is another demonstration of the failure of the invisible hand. If the economic fundamentalists really have so much faith, they should let the chips fall where they may. Surely, the invisible hand will fix everything, right?

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