Monday :: Jun 16, 2008

Putting The "Free" Back In The Free Market?

by Turkana

I'm not into reading between the lines of Barack Obama's speeches, because I think they're so carefully crafted as to be deliberately open to interpretation. I do think he's inclined to be liberal on most issues, but I also think he's inclined to be more moderate and more of an incrementalist than genuine liberals like myself will like. I thought the same of Hillary Clinton, and because I didn't see many substantive differences between Clinton and Obama on the issues, I don't see how Clinton supporters who genuinely care about the issues can be hesitant to vote for Obama. I also don't see how anyone can think the candidates would be a problematic ticket. In the 1980 primaries, George H.W. Bush derided Reagan's tax proposals as "voodoo economics," then once on the ticket seamlessly shifted to supporting them. Clinton would need make no such shifts.

Because interest group ratings are often deliberately skewed, I don't buy into those that call Obama the most liberal senator, and I think those who will try to paint him as a radical lefty will be flatly dishonest. I may write more on this later, but I do think those moderate swing voters who will play a large role in deciding this election have nothing to fear from Obama. He is a safe bet, and the only true radical in this race is John McCain, who wants to continue most of the dangerously extremist policies of the worst president in American history. I am a skeptic, but I would like to think Obama's rhetoric of change does, indeed, presage something truly transformative, because both the nation and the world are in dire need of truly transformative change. So, it was with some interest that I read last week's post by Josh Orton, who linked a Ben Smith article about an interview Obama gave to CNBC. Orton summarized his interpretation of Obama's economic plans:

Obama doesn't use rhetorical sledgehammers often, so the key is reading the layers of what he's saying (especially considering the specific outlet). Obama first sets down a premise that, in theory, markets are the best system to produce and distribute prosperity. But then nearly everything he says after that points to work that must be done to fix failures and make the economy work for people again.

That's fair, but I still don't know that I agree with Orton's reading of Obama's typically careful language. But I want to. Because Orton's interpretation of Obama's intent is precisely what is needed. I particularly like this line of Obama's, as highlighted by Orton:

I am a pro-growth, free market guy. I love the market. I think it is the best invention to allocate resources and produce enormous prosperity for America or the world that's ever been designed.

Because if Orton is right, there is something brilliantly subtle in Obama's framing. Because Obama's touting the free market, which is as mainstream an American economic stance as one can take- but anyone who knows anything at all about economics will tell you that our market is not free. We live in a corporate welfare state, and our government has done little but serve its corporate masters. Obama's quote has a very different tone than the famous quote from a former president whose corporate friendly policies helped lurch us into the Great Depression:

After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world.

A section of the other quote highlighted by Orton demonstrates a far different focus for this modern lover of the free market:

A lot of dislocations have taken place. And all I've said is let's make sure that our economy takes into account not just the winners but also the losers in the economy.

Let's make sure that the burdens and benefits of globalization are fairly distributed. Let's make sure that we are investing in what's required for long-term growth. And I don't think there's any market advocate who would suggest that if our schools are underperforming, if our investment in basic science and research is declining, if young people can't afford to go to college, if our health-care system is broken and more expensive delivering less in terms of quality care than any other advanced nation, that those are good things for the market, then, you know, we should go ahead and make those investments, make those changes, to make this marketplace work better. That's my basic philosophy.

Individual businesses are not concerned with people. Or fairness. They are concerned with making money. Period. For markets to fully function, there must be a balance within them that individual businesses won't always all like. Some would frame this as over-regulation, but it's actually more about preserving the "free" in "free market." If most of those who call themselves free marketers truly cared about the "free," they would oppose the corporate welfare state, which is enormously responsible for the imbalances of our economic system and its wealth distribution. And I will offer one of my favorite examples, which is a long segment from a very long speech given by Robert F. Kennedy, Jr., to the Sierra Club, in 2005:

I want to say this: There is no stronger advocate for free-market capitalism than myself. I believe that the free market is the most efficient and democratic way to distribute the goods of the land, and that the best thing that could happen to the environment is if we had true free-market capitalism in this country, because the free market promotes efficiency, and efficiency means the elimination of waste, and pollution of course is waste. The free market also would encourage us to properly value our natural resources, and it's the undervaluation of those resources that causes us to use them wastefully. But in a true free-market economy, you can't make yourself rich without making your neighbors rich and without enriching your community.

But what polluters do is they make themselves rich by making everybody else poor. They raise standards of living for themselves by lowering the quality of life for everybody else, and they do that by evading the discipline of the free market. You show me a polluter; I'll show you a subsidy. I'll show you a fat cat using political clout to escape the discipline of the free market and to force the public to pay his production costs. That's what all pollution is. It's always a subsidy. It's always a guy trying to cheat the free market.

Corporations are externalizing machines. They're constantly figuring out ways to get somebody else to pay their costs of production. That's their nature. One of the best ways to do that, and the most common way for a polluter, is through pollution. When those coal-burning power plants put mercury into the atmosphere that comes down from the Ohio Valley to my state of New York, I buy a fishing license for $30 every year, but I can't go fishing and eat the fish anymore because they stole the fish from me. They liquidated a public asset, my asset.

The rule is the commons are owned by all of us. They're not owned by the governor or the legislator or the coal companies and the utility. Everybody has a right to use them. Nobody has a right to abuse them. Nobody has a right to use them in a way that will diminish or injure their use and enjoyment by others. But they've stolen that entire resource from the people of New York State. When they put the acid rain in the air, it destroys our forest, and it destroys the lakes that we use for recreation or outfitting or tourism or wealth generation. When they put the mercury in the air, the mercury poisons our children's brains, and that imposes a cost on us. The ozone in particular has caused a million asthma attacks a year, kills 18,000 people, causes hundreds of thousands of lost work days. All of those impacts impose costs on the rest of us that in a true free-market economy should be reflected in the price of that company's product when it makes it to the marketplace.

What those companies and all polluters do is use political clout to escape the discipline of the free market and to force the public to pay their costs. All of the federal environmental laws, every one of the 28 major environmental laws, were designed to restore free-market capitalism in America by forcing actors in the marketplace to pay the true cost of bringing their product to market.

I would like to believe that's what Obama has in mind. It's sound economics, and it's capitalism at its most pure, but it's also good for people and for the environment. Kennedy was a Clinton supporter, but I hope Obama will bring him on board in a very big way. But more importantly, I hope Obama's stated love of free markets is similar to Kennedy's. Because although such an approach would raise an hysterical outcry from the corporate media's defenders of the corporate welfare state (who disguise themselves as capitalists and free marketers), it may be the only approach that can begin to restore not only our economy but our republic. Obama's revolutionary mastery of decentralized political fundraising will provide him an historic opportunity to challenge those who own our government.

Every politician talks about taking on the special interests, but the need for the campaign cash those special interests have hitherto been uniquely capable of providing has consistently rendered such talk but talk. If Barack Obama becomes president, and is going to live up to his soaring idealistic campaign rhetoric, ending the endemic corruption and suppression of free market capitalism will have to be one of his signature accomplishments.

Turkana :: 1:14 PM :: Comments (15) :: Digg It!