YEAH, IT’S THE SYSTEM’S FAULT.

1/11/09

Now that the financial system has “collapsed,” a word that, while perhaps too strong is nonetheless appropriate, it has become distinctly unfashionable to support, as I have done for my entire adult, and most of my adolescent, life, the free market. We are told that the free market has failed, as it did in the ‘20s, and that a new regulatory regime is our only hope if Western civilization is too survive. I say “Balderdash!”

The obvious response to those who have fallen for the siren song of a muscular, busy-body government is that free markets have not failed because free market capitalism has not been attempted, at least not in recent memory. What we are seeing can best, but not entirely accurately, be called corporatism, a system featuring an enormous government dispensing contracts and regulations designed to tilt the playing field toward big business and Wall Street. When the big guys in the corner offices who have purchased the services of our politicians still manage to bollix up not only their own organizations but also the entire economy, the government rides to the rescue. What we are not seeing is the free market, but, rather, a system that is designed to put those who have bought the politicians and their progeny on third base and to pick them up and dust them off when they stumble and fall on their way to the plate. Everything is designed to make things easy and automatic for the bold tough guys who piously proclaim the virtues of the free market, while never having had to subject themselves to its rigors, and run to the apron strings of Big Mama Government when things get the least bit challenging.

This observation that free market capitalism has been absent for a long time (long before our current disaster of an outgoing president) is not a partisan one; neither party has been enthusiastic for the free market because it doesn’t fit well with their misguided messianic mien that it is they, not the grubby practitioners of real capitalism, who should direct society’s resources. Thus, the argument between the parties is not one of free markets vs. government direction of the economy; it is only a matter of which direction to lead those resources. Oddly enough, even that isn’t much of an argument. Since in today’s big government/big business cozy partnership, an economic system that resembles fascism much more closely than it does capitalism, both parties have the same paymasters, both direct government in the same direction: toward big business and Wall Street. But that is another issue.

The other argument against those who favor ditching free markets in favor of tightly controlled rules and regulations is that, even if we were to try free markets again, in this country we are missing two essential elements: fundamental morality and an enlightened, or at least alert, public.

The issue of the confluence of morality and capitalism came up in a conversation I had about fifteen years ago when I was actively involved in the City Club of Chicago, a very interesting organization that allows business and political leaders to interact to discuss, and maybe resolve some of, the burning issues of the day. One of the speakers questioned the prevailing political alliance, under the rubric of the Republican Party, of free marketeers and members of the religious right. He wondered how those who favored morality, or at least their brand of morality, in the public square could embrace a completely amoral free market. The speaker was being disingenuous and was merely using this apparent contradiction to attack what he saw as the hypocrisy of the GOP, as if the Left did not feature alliances between some very strange bedfellows. However, I engaged him.

I pointed out that the market is both completely amoral and extremely powerful. A real free market will deliver whatever the public demands, and will do so very quickly, effectively, and efficiently. If the public demands rosaries, scapulars, bibles, aid to the homeless, and health care for the disadvantaged, the market will deliver. If the public demands pornography, mind altering substances, wholesale child prostitution, and schemes to separate the unsuspecting from their life savings, the market will deliver. That is why an underlying moral framework is much more important, from the standpoint of maintaining order in society, under a free market system than it is in a command and control system. In a command and control system, people don’t have much latitude in what they can demand, and the market is not sufficiently powerful to deliver it to them with the miraculous alacrity of the free market. So a moral foundation is not as essential to the survival of a society in such a system.

Our moral foundation has been deteriorating for a long time, and one does not have to share the moral vision of the religious right to observe the decline of basic morality in our society. Care for one’s fellows, responsibility for one’s actions, personal sexual morality, genuine concern and accountability for one’s children, financial responsibility, etc., have all been deteriorating for decades. The debasement of this fundamental underpinning of our society would make a return to the free market, at least at this stage, precarious.

We also lack an alert public. One of the major themes of the IP is that our society is made up of people who are, to put it nicely, not engaged in what is going on around them and relatively indifferent to the fate of both society and those outside their very narrow scope of interest. Self-government requires, like most do-it-yourself projects, some effort on one’s part, and, rather than make the effort, our somnolent citizenry has turned government over to those who are engaged, and eager to spend money on pols who will do their bidding, who rarely have the interests of the nation in mind.

Being alert requires paying attention, reading the paper beyond the human interest, entertainment, celebrity (more accurately described as the “Who knocked up whom?” section), and sports sections. It involves not only voting (in the primaries and the general) but actually doing the work necessary to cast an intelligent vote. (Watching the news, with its gormless tales of water skiing squirrels, heart rending human interest stories, frustrated comics who call themselves meteorologists, and brainlesss banter between anchor persons who continually mispronounce the names of landmarks in their viewing area, does not make one informed.) It also involves being sufficiently on the ball to realize that you are being misled when you, Mr. Consumer, are being told that you can service a $600,000 mortgage (for the home you deserve and to refinance the credit card bills that sprang from the garbage you really needed) with a $50,000 income.

So free market capitalism, which is being portrayed in many quarters as the source of our financial difficulties, is a museum piece on modern day America, not to mention most of the rest of the world. And if we ever do attempt to reinstall the system that made this country both wealthy and great once upon a time, we will need a moral framework and an alert citizenry, both of which left the building years ago.

And bear in mind that under a truly free system, just because something is necessary does not mean that it should be required. If people want to ruin their own lives, that is their prerogative. It’s that completely crazy personal freedom, coupled with responsibility, idea rearing its inconvenient and challenging head again.