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Free Market Zealots Have Long Been on the Wrong Side of History

Laissez Unfair

by JASON HIRTHLER

As the new atheists have tirelessly rehearsed over the past half-decade, religion poisons everything and should be replaced by some sort of secular credo. Well, perhaps they haven’t noticed, but we’ve already got one. As grim and myopic as your rural madrassa or suburban altar-and-steeple, neoliberalism is a cult as superstitious and baseless as any church of the holy rood, any baptistery of the blood. Believers heed its monotheistic calls for ideological fidelity, ignoring damning case studies and shrugging off blaspheming economists. Its creed was forged in a pin factory, and its first ancestor was named Adam. Its most fanatical adherents don’t understand its first principles, its high priests don’t believe them.

Yet this cult of the abacus has spent the last forty years dinning into our ears the sanctified glories of the free market, so now millions of adults believe that a thoroughly deregulated economy and its companion fetish—a gutted federal government—is the highest calling of mankind. Those who dissent are swiftly buried under an avalanche of cliché. Namely, that the market works in mysterious ways—an utterance generally followed by an improvised homily on the vastness of market knowledge and the paltriness of our own. The combinatorial effect of the former with the latter is intended to render us in a state of mute stupefaction, humble sheep awaiting the beckoning call of the Good Salesman. Empirical evidence need not be summoned, for we take these truths to be self-evident. Hence the need not to test them in reality.

Over the centuries, our laissez faire cult has enjoyed an upward trajectory (a veritable ascension!). Only occasionally has it been beset by blind regulatory tribes. But these foolish marauders have been swiftly dispatched, allowing the moorings of capital controls and tariffs to slip the surly bonds of earth, setting us adrift on oceans of liquidity. Those on Wall Street, and in the hallowed halls of beltway think tanks, are today trembling with anticipation. Like Voltaire’s Dr. Pangloss in Candide, they believe that “all is for the best”. And as Fed billions flood their coffers every month, they wonder if they are indeed living in “the best of all possible worlds”. But what of the millions slipping beneath the quicksand of a jobless recovery? Take heed, ye doubting liberal, croons the glassy eyed convert. Higher powers are in play. Soon all will be revealed.

What has been revealed over several hundred years is that the champions of laissez faire have been frequently on the wrong side of history. For centuries now, the forces of reason and the forces of blind faith have fought tooth and nail to define the shape of modern civilization. Some battles were won by the defenders of fairness. Others by the advocates of market fundamentalism. The rest are still being contested. The mortgage meltdown of 2008 was a consequence of rampant financial securitization and overleveraged insurance swaps, the kinds of financial ‘innovations’ that are the hallmarks of deregulation. The Occupy Movement was at root a challenge to the deregulated economics that has sent America spiraling into the depths of inequality. The recent Bangladeshi protests over collapsing factories on fire are directly related to the march of unfettered global capital. The austerity protests in European capitals were aimed at the dictates of a neoliberal market model. All over the world, voices are rising in unison against a common target.

But history is a good barometer of the validity of an idea. Let’s turn to five arguments from neoclassical history that should lay plain the quality of thought behind the laissez faire doctrine, and help us understand why it is so despised today. I’ve also described the little-known monuments to these lost wars that free market diehards have built to commemorate them.

Five Arguments of Laissez Faire economics (and the monuments they inspired)

1) The Argument for Slavery is commemorated by a statue cast in stainless steel and called The Invisible Hand, which exhibits an exhausted slave hovering over a gigantic GMO cotton plant on the crest of the Texas Hill Country. Pro-slavers of the 19th century like George Fitzhugh and William Joseph Harper believed that the abolition of slavery was a violation of free market principles. After all, shouldn’t a man have the right to sell himself at auction? After abolition, all he was able to do was rent himself for a fee. Naturally, this contractual relationship was intrinsically uncertain, whereas a final sale delivered a peace of mind to the man being bought that no temporary contract could provide. Not only that, but slave owners would naturally keep their permanent ‘possessions’ in a finer fettle than they would rented labor. As such, Fitzhugh argued for universal slavery, suggesting that all men had an “inalienable” right to be slaves.

2) The Argument for Child Labor is memorialized a clever statue carved in coal, which exhibits a small, soot-faced consumptive child bringing his weekly wages home to his deadbeat parents. Nicknamed Black Lung, this statue represents the battle to subject unwitting children to the impenetrable wisdom of the market. Its argument essentially stated that labor ought to be free to do what it likes, whether that be selling one’s soul to the devil or plantation owner, or permitting one’s children to gainfully employ themselves at the corner sweatshop. An 1819 British Parliament bill to regulate child labor—banning those under 10 from working and those between 10 and 16 to limit their hours to a shameful 12 a day—caused an uproar. To gainsayers, the regulatory scheme undermined the sanctity of the contract and prevented a perfectly natural market transaction between illiterate children and base industrial kingpins.

3) The Argument for Opium is canonized in a famous bronze, called Rational Self Interest, which features a stupefied Chinese man lying prone in a den of iniquity, eyes closed and a weak grin on his face. While anyone who has ever been anaesthetized with morphine may lend a sympathetic ear to this argument, it tends to discredit itself when its object is the biochemical enslavement of an entire population. Laissez Faire theology was deployed during the days of the British Empire to defend the sale of opium to the Chinese as a free market right. Or, from the reverse perspective, it was asked what right the British East India Company—and their faithful Bengali field laborers—had to deny surging consumer demand? Clearly, there were plenty of people in Canton clamoring for opiates of every kind. The market was going to be filled one way or another, argued leading British opium importers Matheson Jardine, so they might as well turn a profit for empire instead of ceding it to unscrupulous types. The Opium War of 1839 was launched to demolish a Chinese attempt to outlaw the drug. Lord Palmerston, the British Foreign Minister, famously rationalized the war as a defense of free trade, to the nodding assent of parliament’s scurfy backbenchers.

4) The Argument for Pollution is sanctified by an enormous installation, called Externalities, which features a giant lead cumulus cloud spewing toxic rain on a crowd of Congressional lawmakers. This monument commemorates the heroic struggle of market fundamentalists to protect their right to pollute the earth. More than 60 lawsuits have been filed since the 2007 Supreme Court ruling granting the Environmental Protection Agency (EPA) the right to regulate greenhouse emissions if they were found to be dangerous to the public good. Launched by a paranoid President Nixon in 1970 to pacify rabid earth-firsters, the EPA has suffered nothing but abuse ever since, serving as a perennial target for anti-government fundamentalists. The EPA took a beating from free market fanatics in the 2012 Republican primaries, with Michelle Bachmann calling for its repeal and Mitt Romney accusing it of driving up energy prices. A meeting of the Texas Public Policy Foundation earlier this year issued a “bill of particulars” against the EPA, claiming that total and complete inaction on climate change would be in the best interests of the environment, since “the most successful environmental policies emanate from liberty.”

5) The Argument for Low Wages is memorialized by a glass monument depicting a zigzagging graph of stock prices ascending into the sky. Christened By Stocks and Bounds, the minimum wage argument insists that, if water is permitted to find its level, wages too should be afforded the same natural right. After all, the market works by universal law just like gravity, and may be proved so by Miltonian physics. History is rife with neoclassical theories why raising wages by any amount will instantly obliterate growth. Some like to conjure the ghost of Benjamin Franklin when claiming that the cost of higher wages will automatically be passed on to the consumer by moguls anxious to optimize margins. Higher costs will depress demand, which will depress investment, which will depress employment, which will lower wages, which will ultimately profit penurious moguls once again awash in a sea of cheap labor. In other words, raising wages will lower them slightly less then not raising them at all. But even the slightest of margins must be vigilantly defended. Still, it is hard to see what the problem is here, other than a few pointless empirical studies.

Atlas Drugged

As the above examples lay plain, the religion of the free market is heady stuff. It belongs alongside autographed L. Ron Hubbard tomes in the pantheon of human credulity. The banging of the bell at the stock exchange ought to be installed in a Smithsonian casement next to the most elaborate Haitian voodoo rituals. They are much the same. As Gordon Gekko noted in Wall Street: Money Never Sleeps, “Bulls make money. Bears make money. Pigs? They get slaughtered.”

Today, the cathedrals of capital are attended by financial fleecing crews in their Sunday best. Instead of incense, they burn Camels and Winston’s until the final bell. The ashes are strewn along Wall Street’s splattered pavements. And if you simply laud and applaud the god of the market, fight off any impediments to his unfettered whimsy, you too might find yourself singing hosannas to the highest, perched like Dr. Pangloss over an earthquake zone declaiming a paradise on earth. Only in your case, you’ll be surrounded by fellow believers, waving flags of freedom amid the collapsing scenery of American society. Most likely, you’ll be in a state of high fever. Such are the workings of the invisible hand. As such, you probably won’t notice your children stumbling forth from the fairy palaces, their faces as sooty as their lungs. You won’t notice your black brethren staggering whiplashed back to their airless pens. Or your Asian friends keeling over in fits of giggling inanity, penniless and drug addicted. Nor will you see the forbidding skies overhead, full of smoke and carbon and unfiltered ultraviolet, performing their toxic photosynthesis on your kin. Ah, but surely this is the best of all possible worlds. Amen, brothers Milton and Tom. Verily, it takes a Friedman to understand the virtues of liberty.

Jason Hirthler is a writer and veteran of the communications industry. He lives and works in New York City and can be reached at jasonhirthler@gmail.com.