The Mind of the Market  

Posted by Big Gav

Time for a change of pace, in this case a diversion over to the endless debate about what a "libertarian" is. From a book review of The Mind of the Market, by Michael Shermer by Kevin Carson at the Mutualist Blog:

If you can get past the flaws in Shermer's book (things others might prefer to think of as my fixations, hangups, and dead horses), it's quite an enjoyable read.

But given my obsession with the ubiquity of vulgar libertarianism, comparable to Captain Ahab's with Moby Dick, I can't refrain from pointing out the flaws.

Before I say a lot of nasty things about Shermer's ideological assumptions, I have to make the disclaimer up front that he comes across as thoroughly decent and likeable on a personal level. That he takes for granted certain ideological assumptions that I have long since declared war on is no reflection on him as a human being. Shermer states, as one of his fundamental guiding principles, a dictum of Spinoza's: "I have made a ceaseless effort not to ridicule, not to bewail, not to scorn human actions, but to understand them." I'll try to keep to that spirit as closely as I can in discussing my caveats about Shermer's book.

Nevertheless, Shermer displays a considerable vulgar libertarian element in his background assumptions. His writing, over and over, tacitly equates the phenomena of existing corporate capitalism to the "free market." He constantly uses things like Bill Gates, Wal-Mart, and other transnational corporations to illustrate the principles of the "market," and treats them as living embodiments of Adam Smith's invisible hand. He equates "the market" to the existing corporate economy, quoting attacks on the evils of corporate power and then "proving" they can't be right because "that's not how the market works." Implicit in his rejection of The Corporation, of Chomsky and Zinn, is the assumption that the present system, the one they're attacking, is the market.

A parallel theme is alleged popular hostility or resistance to "free market economics," which he assumes is motivated by irrationality. A particularly atrocious example (I'm tempted to call it a howler) occurs on page 16:
Folk economics leads us to disdain excessive wealth, label usury a sin, and mistrust the invisible hand of the market. What we do not understand we often fear, and what we fear we often loathe. (As one New Yorker cartoon featuring two people in conversation reads: "I hated Bill Gates before it became so fashionable.")

There you have it: invisible hand=excessive wealth=Bill Gates. Anybody who has problems with Bill Gates and excessive wealth must harbor an irrational fear and/or hatred for "the invisible hand of the market." After all, it's not like Gates could have gotten so rich by any other means, like the visible hand of the state's "intellectual property" [sic] monopoly, could he? And we know all those other billionaires got rich through the operation of the "free market." I mean, we hear it from neoliberal politicians and commentators at MSNBC every friggin' day, so it must be true. This all reminds me of Dick Cheney in 2000 boasting, of Halliburton's wealth, that "Government had nothing to do with it."

The public mindset isn't really all that irrational, if you keep in mind that their hostility is not so much to free markets, as to what has been called "free markets" by the usual gang of corporate apologists.

I'm about as close to a free market fundamentalist as you can get. But if I thought the "free market" meant what Tom Friedman and other neoliberal politicians and talking heads meant by it, I'd hate it more than anybody.

The average person sees Wal-Mart, Microsoft, downsizings, oil company profits, offshoring, and all the other unsavory phenomena of the corporate global economy defended in "free market" language, and his response is "if that's the free market, then the free market be damned." It's essentially the same reaction as Huckleberry Finn's. Huck lacked the conceptual apparatus to make an effective critique of the legitimizing ideology of slavery, or to debunk the Widow Douglas's "property rights" in Jim. He took the slave system's ideological self-justification at face value--and then said "All right, then, I'll go to hell." The average American, likewise, looks at the inequalities and injustices of our corporatist economic system, made possible by massive state intervention on behalf of organized capital, and sees it defended as the "free market." And his response is the same: "If this is the free market, I'll go to hell."

Shermer asks why people reject Adam Smith's theory of economics, despite its being so profound and proven. The answer just might be that the rhetoric of free markets, so closely associated with Adam Smith, has been misappropriated to defend a system of corporate power far closer to what Smith condemned than to what he supported. Adam Smith, like the other early classical liberals, was a revolutionary thinker who attacked the entrenched privileges of the landed oligarchy and the mercantile capitalists. It's almost impossible to go to a mainstream "libertarian" website these days without seeing the thought of Adam Smith misappropriated to defend the modern institution most closely resembling the landed interests and privileged monopolists of the Old Regime: the giant, state-subsidized, state-protected corporation.

As I suggested earlier, most people who display egalitarian reactions against existing inequalities and concentrations of wealth may well believe that what they hate is the "free market." But that's only because the rhetoric of "free markets" has been perverted, for the most part, by apologists for those concentrations of wealth which result from privilege and other forms of state intervention. What they hate, they rightly hate. They're wrong to believe that what they hate is the "free market." But it's hard to blame them, when you can't turn on the TV or read an editorial page without seeing a fundamentally statist economic system of special privilege and protection for big business and the rich described as "our free market system."

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