Neoliberal philosophy rules our economy
Glenwood Springs, CO Colorado
Most of us have been won over to a false doctrine and political agenda counter to our values and interests.
Not many of us realize that the statements asserted over and over as self evident by our media and politicians are based on an underlying philosophy. And in the past 50 years, they have been based on an economic philosophy variously named neoliberalism, corporate liberalism or economic rationalism.
It is a philosophy holding that unfettered, unregulated free markets, both national and international, will best serve our interests. This philosophy is based on the market theories of Adam Smith, who published his opus in 1776, and the trade theories of David Ricardo, who published his major work in 1819.
Their work was very insightful in its day, but even a cursory examination shows their views to be irrelevant in today’s world.
Smith said free markets would provide the greatest wealth for all, assuming three conditions:
1. That markets consisted solely of small buyers and sellers, none large enough to hinder fair competition.
2. That the full cost of production be borne by the producers and reflected in the selling prices of their products.
3. That capital is locally and nationally rooted, and owners directly manage their enterprises.
In this day of global domination by large corporations managed by a strange class of CEOs seemingly responsible to no one but each other, it’s not even necessary to discuss items 1 or 3.
Smith’s definition of an efficient market was one composed of small, owner-managed enterprises located in the communities where the owners resided. Of course that would be efficient and probably beneficial to all. But that’s not today’s world.
And it doesn’t take much discussion to show that today’s economy almost completely ignores item 2, since the full costs of production are almost never borne by global corporations or reflected in the prices of their products. In fact, this is a huge part of the reason we are busily destroying the planet.
When a giant corporation dumps untreated waste it passes the costs of the resulting air, water and soil pollution onto society and its taxpayers in the forms of sickness and suffering, additional health care costs, and the costs of government attempts to clean up. Economists call this externalizing costs.
And when that corporation sells its products more cheaply than the full cost of their production because it has externalized costs, this has a further bad effect. It causes overconsumption and a waste of finite resources.
It’s hard to think of any major industry in today’s world that is not guilty of a great amount of cost externalizing. Oil, chemicals, automobiles, you name it.
That a significant number of academic economists, such as Alan Greenspan, have so ignored these facts and pushed the worship of “free markets” during the past 50 years, I, for one, cannot attribute to stupidity because I cannot believe they are that stupid. I have to attribute it to greed and ambition. Their free-market religion has been beloved of and rewarded by the very wealthy shakers and makers of our society.
There have been plenty of academic economists pointing out how wrong neoliberalism is, and they have been and are teaching in prestigious universities. But they have been outshouted by the well-funded and well-appointed others, and they have not received the important posts that determine the policies of government.
The power of corporate campaign contributions has assured that neoliberals get all the important posts. And the corporate-owned media has endlessly parroted the neoliberal view.
I hate to say it, but even Obama has appointed mainly neoliberals, those supported by Wall Street, to the positions that have determined his economic policy.
This is certainly not what I want. How about you?
– Mary Boland is a retired teacher and journalist, a proud grandmother, and a longtime resident of Carbondale. Follow her on twitter@grannyboland
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