Saturday, June 23, 2012

The lie of the free market

"If you work hard, you will succeed. If you don't succeed, it's because you didn't work hard."

That's essentially the credo of free-marketeers everywhere. It's intuitively appealing in part because it's such a simple formulation.

That credo rests on an unspoken assumption that remains unspoken because it seems so obvious: the playing field is level. Everybody has an even chance to climb the ladder.

It's time for us to acknowledge that the playing field isn't level. Not in the United States.

I'm not talking about the well-known phenomenon that wealth begets wealth. That has always been the case, and will always be. I'm talking about the reality that if you want to go from working at Walmart to earning a decent, middle-class living, the odds are stacked hugely against you.

Don't believe me? Then tell me: where are the jobs?

Even if you have a college degree, the jobs are scarce. And if you don't have a college degree, the jobs are not only scarce, they're totally inadequate to supporting a family.

Where are the good-paying jobs of yesteryear? Sent offshore.

Where is the seed crop, so to speak, for creating new good-paying jobs? It's either on Wall Street, figuratively and literally speaking, or in tech. The trouble is, Wall Street today is essentially parasitic and tech industries are all about intellectual property. Being parasitic, Wall Street doesn't create real value, it creates imaginary value by leveraging real assets in irresponsible ways. Tech, being concentrated on intellectual property, doesn't need a huge number of people to do anything: it needs a limited number of people to think of things. To the extent that the tech industry makes tangible goods, those goods are made overseas.

Wall Street, in other words, is a morally bankrupt source of employment. Tech is a high-profile but totally insufficient source of employment.

The U.S. economy today is geared toward providing services, not manufacturing goods. It's an emphasis that is guaranteed to spiral this country downward, both in terms of economic prowess and the difficult to measure capacity of self-respect. Except for food (and not even all of that), we don't make things for one another: we offer services to one another. The trouble with that is, we still need tangible goods.

Kevin Phillips in the 2006 book American Theocracy explains that since the 1980s, the financial-services industry has played an outsized role not only in the economy, but in policymaking. The industry skewed federal legislation and regulation to benefit itself and in the process promoted the transfer of good-paying jobs overseas. With those jobs went the middle-class standard of living.

At one time, this nation might have been the land of opportunity free-marketeers still think it is. But no longer. The playing field stopped being level twenty or even thirty years ago, and it has been tilting away from the 99% ever since. It's time for us to acknowledge that reality — and to stop calling attempts to restore some kind of equilibrium "socialist" or other phony, stupid epithets.

And it's time to call those supposed defenders of the free market who are perpetuating the distorted status quo what they are: self-interested tools who are looking out for nobody but themselves. That's the capitalist way, of course, but it only works when we all have the economic freedom to pursue our own self-interest. We don't have that today.

(This post wouldn't have happened if I hadn't been inspired — or perhaps the word is "outraged" — by tonight's episode of Moyers & Company in which Matt Taibbi and Yves Smith excoriated our too-big-to-fail financial institutions.)

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