The Fallacy of the “Free Market”

Posted on July 12, 2014 by wellsdc

The Gloomy Historian explains how it is a mistake to view the “free market” as some sort of independent, even natural entity, rather than a system of rules backed and enforced by government and others. Here’s a snippet:

When abstractions are spoken of as real things, we call it reification. Reification is a semantic fallacy, but its use is sometimes necessary when one wants to communicate complex realities with considerably less words. However, a semantic fallacy, if not challenged, can go on to support faulty conceptualizations of reality, especially once it seeps into discourse. The special problem in this case is that the reification complements an ideology, one that rejects the natural and necessary role of the government in the maintenance of the economy. If expressed as a thing, “free market” can be thought of as being interfered with or kept from its natural activities. If expressed as an entity, it can be given agency, rationality, and rights. We often talk about government intrusions in the personal lives of people. For some, a worse offense is when the government intrudes in the free market.

But this conveys a faulty conception of reality. As Robert Reich states: “Government doesn’t ‘intrude’ on the free market. It defines and organizes (and often reorganizes) it.” In reality, an economy is the product of an infrastructure of law that is created, maintained, and enforced by the government. It is an extension of the state for the purpose of ordering the complex human interactions that occur with economic activity. And with the constant growth and complexity of technology, which puts economic relations in flux and opens loop holes for economic actors to exploit, these interactions need to be monitored regularly and the laws adjusted accordingly. The “free market” is not a thing with a right to existence and freedom from molestation; it is a name for something that does not exist without the state and whose quality is wholly dependent upon the laws that form it.

What I’m Reading, July 11, 2014

Posted on July 11, 2014 by wellsdc

The American myth about entrepreneurs is dying, Eric Garland, Eric Garland Blog, May 20, 2014

America used to have a myth that it supported and honored entrepreneurs. I was certainly raised with it. My father owns a farm store, my mother ran a pie shop, my sister has a dance school, my Italian grandparents had their own bakeries, et cetera. I always thought that owning your own business was not only possible, it was preferable, somehow more noble than working in the boiler room of someone else’s company. I am an American, and it wasn’t until I arrived in Paris that I realized that this was a myth which had not been internalized by everybody, everywhere. In France, I was forced to confront the notion that some people saw small business as being a petty, money grubbing merchant who could not survive in the larger, more important world of state institutions and major businesses. Quite a shock, really.

Yet this is a myth I still cherish and here’s why: small businesses tend to produce the greatest job growth. Huge companies are more dominant in an industry, but small companies are the most likely to grow and create a new position with wealth, a tax base, a market for other businesses and all that good stuff. Yet our policies are making the world more friendly to the big and more hostile to the small. There was a guy who wrote about this a lot in the 18th century: Adam Smith. In his Wealth of Nations, he saw large businesses protected by the government as unjust and inferior to smaller businesses with accountability to their neighbors. His theory was called capitalism and we have gotten away from it in recent years.

Americans need to Answer: When Will Palestinians get their Fourth of July? Juan Cole, Informed Comment, July 4, 2014 Continue reading →

The Blind Leading the Incredulous

Posted on July 11, 2014 by wellsdc

Atrios makes an excellent point that we should not assume, despite certain appearances, that the “super rich” are orchestrating the conditions of our economy with complete awareness:

That rich elites weren’t begging the government to take the health care nightmare off their hands taught me that they often don’t have any idea what they’re doing.

What I’m Reading, June 25, 2014

Posted on June 25, 2014 by wellsdc

Everything Is Broken, Quinn Norton, Medium, May 20, 2014

It’s hard to explain to regular people how much technology barely works, how much the infrastructure of our lives is held together by the IT equivalent of baling wire.

Computers, and computing, are broken.

Chicken Littles of the Right, Gavin Mueller, Jacobin, May 21, 2014 (h/t Erik Loomis)

So that trickle of piss running down James Piereson’s leg and pooling in his wingtip is another iteration of billionaire victimology, just another boring maneuver from the Reagan playbook that kids these days are totally over. Yes, after the massive heist of the financial crisis of 2008, exactly one Wall Street executive, Kareem Serageldin, is heading to jail, while thousands of victims head to homeless shelters and soup kitchens. Serageldin’s Christ-like gesture: to do 30 months for the sins of the financial elite.

Not a bad deal — and yet how they complain. They whine about being called “banksters” — the ignominy of such disrespect is enough to make the Chateau Petrús turn bitter in one’s mouth. On the other coast, tech-overlords are so intimidated by the specter of tax-raising masses that they’ll sink millions into childish fantasies of Galt Islands, while openly disdaining democracy.

What I’m Reading, May 8, 2014

Posted on May 8, 2014 by wellsdc

By Ralph Chaplin [Public domain], via Wikimedia Commons Republicans are Trying to Mix the Ideologies of Jesus Christ with an Atheist and That Doesn’t Make Any Sense, Allen Clifton, Forward Progressives, April 14, 2014

It’s amazing to me how few conservatives know who Ayn Rand is. Especially considering that she’s quite possibly the most influential person behind most of the Republican party’s economic ideologies.

She was a person who spoke out against social programs, believed that people should only worry about themselves, opposed big government and worshiped at the “glory” that is unregulated capitalism. In other words, she’s the epitome of what most Republicans support economically.

***

There’s just one problem – Ayn Rand was an atheist. Not that there’s any problem at all with being an atheist (more power to you) but there is a big problem with a political party that builds its social platform on “Christian” values while basing its economic ideology on that of someone who didn’t believe in God.

How Piketty’s Bombshell Book Blows Up Libertarian Fantasies, Lynn Parramore, Moyers & Company, April 30, 2014 Continue reading →

What I’m Reading, May 1, 2014

Posted on May 1, 2014 by wellsdc

By Pkg203 (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons The Sharing Economy Isn’t About Trust, It’s About Desperation, Kevin Roose, New York, April 24, 2014

Wired‘s cover story this month is about the rise of the “sharing economy” — a Silicon Valley–invented term used to describe the basket of start-ups (Uber, Lyft, Airbnb, et al.) that allow users to rent their labor and belongings to strangers. Jason Tanz attributes the success of these start-ups to the invention of a “set of digital tools that enable and encourage us to trust our fellow human beings,” such as bidirectional rating systems, background checks, frictionless payment systems, and platforms that encourage buyers and sellers to get to know each other face-to-face before doing business.

Tanz’s thesis isn’t wrong — these innovations have certainly made a difference. But it leaves out an important part of the story. Namely, the sharing economy has succeeded in large part because the real economy has been struggling.

A huge precondition for the sharing economy has been a depressed labor market, in which lots of people are trying to fill holes in their income by monetizing their stuff and their labor in creative ways. In many cases, people join the sharing economy because they’ve recently lost a full-time job and are piecing together income from several part-time gigs to replace it. In a few cases, it’s because the pricing structure of the sharing economy made their old jobs less profitable. (Like full-time taxi drivers who have switched to Lyft or Uber.) In almost every case, what compels people to open up their homes and cars to complete strangers is money, not trust.

Most of What You Think You Know About Sex Trafficking Isn’t True, Amanda Hess, Slate, April 23, 2014 Continue reading →

What I’m Reading, April 30, 2014

Posted on April 30, 2014 by wellsdc

By Constitution_Pg1of4_AC.jpg: Constitutional Convention derivative work: Bluszczokrzew (Constitution_Pg1of4_AC.jpg) [Public domain], via Wikimedia Commons Libertarian Law Prof Debunks Bundy Nonsense, Ed Brayton, Dispatches from the Culture Wars, April 25, 2014

As some of the more militant libertarians, especially the anarcho-capitalists, flock to the support of Cliven Bundy in his standoff with the federal government, most of the libertarian-minded law professors are debunking their absurd claims and pointing out how gloriously wrong those people are. Josh Blackman is one of them.

First, Bundy seems to reject the Constitution’s property clause. (It was a wonderful twist of scheduling fate that I assigned the “Property Clause” in ConLaw the week after the Bundy Ranch standoff. ) In an interview he said that the federal government has “no jurisdiction or authority” on his grazing rights. Under the Property Clause, Congress has the power to “dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.” The land at issue was owned by the United States prior to Nevada statehood as a territory. I suspect Bundy will argue that his family has obtained a prescriptive easement on the land, as it has continuously, openly, and (absolutely) hostilely, grazed on the land for 170 years. Though, adverse possession is not permissible against the federal government. Continue reading →

I Am a Gentrifier

Posted on April 28, 2014 by wellsdc

Natalia Wilson [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0/)], via Flickr A little over a year ago, we moved into a neighborhood in east Austin that was entirely unknown to me even a few months earlier. We are, to phrase it as pretentiously as possible, part of the vanguard of gentrification in this area. Our zip code ranks in the bottom half of Austin zip codes in terms of median income and education level. The signs of future gentrification, from a rising abundance of house flippers to the beginnings of actual road maintenance, are making themselves known—and part of me feels very bad about this.

The conventional wisdom among progressive white Gen Xers is that gentrification is a Bad Thing, but no one has ever come up with a viable alternative if you can’t afford to live anywhere else within a city. We wanted to live somewhere with convenient access to downtown (where my wife works), with a big yard (where our dogs run and poop), and with at least one extra bedroom to put my desk (where I “work”). Other neighborhoods didn’t just exceed our price range, they actively mocked it. But should I actually feel any sort of complicity in the fact that prices are going up in this area, and that sooner or later, people who have lived here longer than us won’t be able to afford it any more? Was there actually anything we could have done differently? Maybe, but maybe not, if a recent article by Daniel Hertz in The Atlantic Cities is any indication (h/t Marley): Continue reading →

What I’m Reading, April 22, 2014

Posted on April 22, 2014 by wellsdc

Is Our Elites Learning, Atrios, Eschaton, April 18, 2014

The problem with the Lifestyles Of The Not Quite Rich Enough genre is there’s never any hint that anyone involved (reporters, subjects) take the next step and think, “oh, gosh, if I can’t live on $300K what must it be like to live on $50K!!!!”

“You’re leaving? Are you effing kidding?” An anti-gay bigot gets humiliated, Kate Geiselman, Salon, April 16, 2014

When Peter LaBarbera saw that close to a hundred people had assembled at my college to hear his warning about “the gay agenda,” I’m sure he was thrilled. He is the president of a group called Americans for Truth About Homosexuality, which describes its mission as being “dedicated to exposing the homosexual-bisexual-transgender activist agendas.”

When, less than 10 minutes later, he was left with an audience of about a dozen, he was angry. Angry enough to say, as the masses marched out, “You’re leaving? Are you effing kidding?” Angry enough to tweet, later that evening, “Two liberal professors lead their students in a walkout of my talk … rather than allow them to hear an opposing viewpoint.”

Except that’s not exactly what happened. What happened was much bigger than that, but I should back up a bit.

Is growth always good? Mano Singham, Freethought Blogs, April 17, 2014

It seems to be almost axiomatic these days to think of economic growth as an unfettered good. But must it always be so? Johann Hari in the April 2010 of The Progressive magazine wrote in a review of a book about John Maynard Keynes, whose influential work has been used to fuel growth, about what that famous economist thought about when we might know that it might be time to call a halt to growth.

***

The key is to try and ensure that everyone has a basic level of comfort and security, and the current rapidly growing inequality works against that.

What I’m Reading, April 9, 2014

Posted on April 9, 2014 by wellsdc

By Marc Gallant (Flickr) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons I’m Not Your Disappearing Indian, Jacqueline Keeler, Indian Country Today Media Network, April 3, 2014 (via Jezebel)

No, it wasn’t Stephen Colbert who forgot about us, nor was it “Stephen Colbert,” a character played by comedian Stephen Colbert, to satirize the extreme insensitivity of Republican conservatism. His show,The Colbert Reportdid a whole skit skewering Dan Snyder, billionaire owner of the Washington Redsk*ns, and Snyder’s new Original Americans Foundation (OAF), exposing it — through satire — as a blatant attempt to use charity to provide cover for his NFL team’s racist name. It was the hashtaggers, PoC (People of Color) and progressives, our own allies on Twitter who trended the hashtag #CancelColbert in response to the fictional foundation’s name featured in the skit. And yet, Dan Snyder’s real foundation promoting an ethnic slur against us, a foundation thatactually exists, failed to garner even a tiny fraction of outrage by the same group. In fact, in her Time Magazine article that followed the enormous success of #CancelColbert, hashtag originator Suey Park failed to mention Snyder’s foundation at all. She certainly did not mention the Native hashtag protesting it #Not4Sale, despite it being covered by Mike Wise at the Washington Post and Al Jazeera America’s The Stream just days before. Only one reporter, Jeff Yang of the Wall Street Journal included any mention of Native responses to it.

Mega-Donors Are Now More Important Than Most Politicians, Peter Beinart, The Atlantic, April 4, 2014

The astonishing concentration of wealth among America’s super-rich, combined with a Supreme Court determined to tear down the barriers between their millions and our elections, is once again shifting the balance of power between politicians and donors. You could see it during last weekend’s “Sheldon primary,” when four major presidential contenders flocked to Las Vegas to court one man. When Chris Christie, not known for backing down from a fight, used a phrase (“occupied territories”) that Adelson disliked, he quickly apologized. And with good reason. Adelson, who probably spent north of $100 million in the 2012 election, can single-handedly sustain a presidential candidacy, or wreck one. He’s certainly wields more influence over American politics than most members of the United States Senate.

It’s time the press starts behaving accordingly. The media, for the most part, still treats elected officials as the key players in our political process. They get most of the scrutiny. Mega-donors, by contrast, are permitted a substantial degree of anonymity. Now that must change. If Adelson or the Koch brothers or their liberal equivalents can single-handedly shape presidential campaigns and congressional majorities, their pet concerns and ideological quirks deserve more journalistic attention than do those of most members of congress. It’s no longer enough to have one reporter covering the “money and politics” beat. Special correspondents should be assigned to cover key mega-donors, and should work doggedly to make their private influence public.

Photo credit: By Marc Gallant (Flickr) [CC-BY-2.0], via Wikimedia Commons.

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