market fundamentalism

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By ROBERT REICH*

To reverse inequality, we need to deconstruct the myth of the “free market”

How could a sizeable handful of billionaires – whose vast fortunes have multiplied even during the pandemic – convince the vast majority of the public that their wealth should not be taxed to support the common good?

They employed one of the oldest methods used by the richest to maintain wealth and power – a belief system in which wealth and power in the hands of a few appears to be natural and inevitable.

Centuries ago, it was the so-called “divine right of kings”. King James I of England and King Louis XIV of France, among other monarchs, maintained that kings received their authority from God and therefore were not accountable to their earthly subjects. This doctrine saw its end with the Glorious Revolution of the XNUMXth century and the American and French Revolutions of the XNUMXth century.

Its modern equivalent might be called “market fundamentalism,” a belief that has been promoted by today's super-rich with the same enthusiasm that the old aristocracy had for its divine right. According to her, what you get is simply a measure of what you are worth in cash.

If you accumulate a billion dollars, you certainly earned it, because such an amount was a prize received from the market. If you barely survive, it's all your fault. If millions of people are out of work or their wages are shrinking, or they have to take two or three jobs and they have no idea what they're going to get the next month or even the next week, it's a shame, but this is it. the result of market forces.

This prevailing view is absolutely false. A “free market” cannot exist without a government. A market – any market – needs a government to create and enforce the rules of the game. In most democracies, such rules emanate from legislatures, administrative agencies, and courts. The government does not "interfere" with the "free market". It creates and maintains the market.

Market rules are neither neutral nor universal. They partially reflect society's norms and values. They also reflect who in society has the most power to create or influence the unspoken rules of the market.

The endless debate about whether the “free market” is better than “government” makes it impossible to examine who wields that power, how they benefit from it, and whether those rules should be changed so that more people benefit from them. The myth of market fundamentalism is therefore extremely useful to those who do not want such an examination to take place.

It is no accident that those with disproportionate influence over the rules of the market – who are the greatest beneficiaries of the creation and adaptation of these rules – are also those who most vehemently support the “free market”, and are the most ardent defenders of superiority. relative of the market over the government.

the debate market vs. government it only serves to distract the public from the underground reality of how rules are generated and changed, the power in moneyed interests over this process, and the extent of their resulting gains. In other words, these “free market” advocates not only want the public to agree with them on the superiority of the market, but also on the central importance of the never-ending debate over who – the market or the government – ​​should prevail.

That is why it is so important to expose the underlying structure of the so-called “free market” and to show how and where power is exercised over it.

Inequalities in income, wealth and political power continue to increase across advanced economies. This is not the only possible reality. But to reverse it, we need an informed public able to see through the mythologies that protect and preserve today's super-rich, as well as the Divine Right of Kings of centuries ago.

*Robert Reich is a professor of public policy at the University of California-Berkeley. He was the United States Secretary of Labor during the Bill Clinton administrations (1993-1997).

Translation: Daniel Pavan

Originally published in the newspaper The Guardian.

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