Economic systems

"One of the most prevalent ideological mantras of Western capitalism is that the market should rule. But as the latest health and economic crises demonstrate, capitalists soon forget their worship of the market when times get tough. They scream for government money, and plenty of it. It turns out that “the market” is fine when it comes to whipping workers to accept lower wages, but when it comes to lower profits, the market can go hang."

"Every student with the misfortune to have studied economics at school or university will know that “the market” is the god before which we must all kneel. Markets bring s and producers together to ensure an equilibrium of , the textbooks tell us. We may all be individuals each pursuing our own private interests, but this selfish endeavour miraculously results in an optimum outcome for all. You don’t even have to step inside a classroom to have received this lesson. It’s rammed home in normal times in every newspaper, in every news bulletin on the TV, in every politician’s speech. Just listen to them. Governments can’t expand spending on Newstart because “the markets” won’t allow it. Governments shouldn’t ramp up public housing because that will throw property markets into a spin. Competition should be opened between universities because a market in education will sift out the bad providers from the good. The champions of the market, if challenged to explain how it is that markets consistently result in supplies of goods lurching from shortages to gluts, point to the economic dysfunction of the old Soviet Union as proof that if “planning” replaces the market, a much bigger disaster ensues. It doesn’t take an Einstein to see what rubbish this is. The last thing any capitalist wants is “free competition”, because that might squeeze their profits. Just look at how the supermarkets have destroyed small shops or how any new industry that emerges is soon dominated by three or four companies globally."

"But there’s another angle to this. Capitalists preach “the market” for the working class – stand on your own two feet, don’t rely on the government – but themselves sponge off the public big time. Just look at the billions in subsidies and tax concessions the fossil fuel companies, huge enterprises for the most part, extract from state and federal governments in Australia. The vehicle manufacturers raked in hundreds of millions a year from the for decades until deciding it wasn’t enough and went overseas. This is why big companies and industry groups hire armies of former politicians to lobby on their behalf in the offices of premiers and prime ministers – there’s money in government coffers and they want it. And while the capitalists talk about “the market” setting wages for workers, in reality, they don’t really allow the market to do the job. They use the whole apparatus of state repression, the industrial tribunals, the police, the courts to suppress workers’ rights to organise to pursue their demands. But when a crisis hits all the bullshit about the market is thrown to the winds. And that is just what we are seeing now. Faced with the collapse of the capitalist economy, for the second time in a dozen years, with massive bankruptcies on the table and the stock market plunging by more than 30 percent and more to come, fervent advocates of the free market are now embracing government intervention to save their skins."

"The current crisis demonstrates not only that all the ideological nonsense about the virtues of the free market is quickly thrown overboard when capitalist interests are threatened, but also that the idea that governments are essentially powerless in the face of the markets is rubbish. Governments are not helpless victims who cannot do anything in the face of “economic reality”. In the normal course of events, when we demand things like better welfare, health care or education, governments tell us that it isn’t possible."

"So, in an economic emergency, few of the usual rules apply. Governments can marshal the resources and can threaten the narrow interests of private businesses. Hardcore libertarians despise these measures as rampant socialism. From their perspective, they’re right: the very existence of such programs is condemnation of the free market capitalist model that they promote. But they are best seen only as another approach to the management of the capitalist economy. The fact that governments across the are now prepared to spend trillions of dollar to save the from collapse only confirms that the world economy cannot be left safely in the hands of “the market”. And, the situation clearly confirms that when the capitalist class and governments deem it necessary to save their system, lots of measures they once denounced as “unaffordable”, not permitted by the condition of “the economy”, are actually affordable and permitted. Governments can act when required. The ideological justifications of yesterday are revealed as threadbare. But nor are government interventions of this nature geared towards the interests of the working class, only the interests of the bosses."

"Vulgar libertarian apologists for capitalism use the term "free market" in an equivocal sense: they seem to have trouble remembering, from one moment to the next, whether they’re defending actually existing capitalism or free market principles. So we get the standard boilerplate article arguing that the rich can’t get rich at the expense of the poor, because "that’s not how the free market works"—implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that the present system is not a free market, and that it includes a lot of state intervention on behalf of the rich. But as soon as they think they can get away with it, they go right back to defending the wealth of existing corporations."

"So, recently, though it wasn’t reported here, there were negotiations with Australia to establish what’s called a free trade agreement.... The negotiations were held up for some time because the United States was objecting to Australia’s highly efficient health care system. ... Why was the U.S. objecting to the Australian system? Well, because the Australian system is evidence-based... They have to provide evidence that the drug actually does something, that it is better than some cheaper thing that’s already on the market. That evidence-based approach, the U.S. negotiators argued, is interference with free markets, because corporations must have the right to deceive... The claim itself is kind of amusing, I mean, even if you believe the free market rhetoric for a moment. The main purpose of advertising is to undermine markets. If you go to graduate school and you take a course in economics, you learn that markets are systems in which informed consumers make rational choices. That’s what’s so wonderful about it. But that’s the last thing that the state corporate system wants. It is spending huge sums to prevent that."

"As the most powerful state, the U.S. makes its own laws, using force and conducting economic warfare at will. It also threatens sanctions against countries that do not abide by its conveniently flexible notions of "free trade." In one important case, Washington has employed such threats with great effectiveness (and GATT approval) to force open Asian markets for U.S. tobacco exports and advertising, aimed primarily at the growing markets of women and children. The U.S. Agriculture Department has provided grants to tobacco firms to promote smoking overseas. Asian countries have attempted to conduct educational anti-smoking campaigns, but they are overwhelmed by the miracles of the market, reinforced by U.S. state power through the sanctions threat. Philip Morris, with an advertising and promotion budget of close to $9 billion in 1992, became China's largest advertiser. The effect of Reaganite sanction threats was to increase advertising and promotion of cigarette smoking (particularly U.S. brands) quite sharply in Japan, Taiwan, and South Korea, along with the use of these lethal substances. In South Korea, for example, the rate of growth in smoking more than tripled when markets for U.S. lethal drugs were opened in 1988. The Bush Administration extended the threats to Thailand, at exactly the same time that the "war on drugs" was declared; the media were kind enough to overlook the coincidence, even suppressing the outraged denunciations by the very conservative Surgeon-General. Oxford University epidemiologist Richard Peto estimates that among Chinese children under 20 today, 50 million will die of cigarette-related diseases..."

"The excesses are not abnormalities but are exactly how we would expect unregulated markets to work, especially when capital has the law and politics on its side. Monopolies can charge a high price when consumers (once known as patients) do not react or when they move to another provider, and thus an unconscious roadside casualty is the perfect victim. In retrospect it is not so surprising that free markets, or at least free markets with a government that permits and encourages by the rich, should produce not equality but an extractive elite that predates on the population at large. Utopian rhetoric about freedom has led to an unjust social dystopia, not for the first time. Free markets with rent seekers are not he same as competitive markets; indeed, they are often exactly the opposite."

"Greg, what are you talking about? Ending corruption? Like there’s a version of this society that isn’t corrupt? Corruption isn’t the exception, it’s the norm. It’s baked in. The whole idea of using markets to figure out who gets what is predicated on corruption—it’s a way to paper over the fact that some people get a lot, most of us get not much, and so we invent a deus ex machina called market forces that hands out money based on merit. How do we know that the market is giving it to deserving people? Well, look at all the money they have! It’s just circular reasoning."

"The free market system is implied, Hayek felt, by his ontology in order to attain maximum human productivity, the highest standard of living for all—the utilitarian-liberal-socialist-communist-libertarian goal. The division and paucity of individual knowledge renders a market economy necessary for optimal economic productivity. The utilization and communication of information and knowledge are critical."

"Slavery was a byproduct of the quest for profit—economic actors were the architects of the slave plantation systems that came to dominate American society from the Southern United States to the Caribbean and Brazil. It was merchants and planters, not statesmen and jurists, who determined that slave labor was more profitable than free. ... This history constitutes a welcome corrective to the fashionable view that free markets automatically promote social justice."

"Now, as then, commerce unrestrained by social control ends up stripping economic relations of all moral content, while the drive toward fulfilling market demands at the lowest possible price creates widespread indifference to the conditions under which marketable goods are produced. Today’s Chinatown sweatshops and Third World child labor factories are the functional equivalents of colonial slavery in that the demands of the consumer and the profit drive of the entrepreneur overwhelm the rights of those whose labor actually produces the salable commodity."

"Underlying most arguments against the free market is a lack of belief in freedom itself."

"Faith in natural order and market efficiency forecloses a full normative assessment of market outcomes. ... It effectively depoliticizes the market itself and its outcomes. It is only when the illusion of natural order is lifted that a real problem arises: that of the justice of the organizational rules and their distributional consequences."

"If by free market one means a market that is autonomous and spontaneous, free from political controls, then there is no such thing as a free market at all. It is simply a myth."

"People commonly think of neoliberalism as an ideology that promotes totally free markets, where the state retreats from the scene and abandons all interventionist policies. But if we step back a bit, it becomes clear that the extention of neoliberalism has entailed powerful new forms of state intervention. The creation of a global 'free market' required not only violent coups and dictatorships backed by Western governments, but also the invention of a totalizing global bureaucracy – the , the , the and bilateral s – with reams of new laws, backed up by the of the United States. In other words, an unprecedented expansion of state power was necessary to force countries around the world to liberalize their markets against their will. As the has known ever since the in , when British gunboats invaded China in order to knock down China's trade barriers, free trade has never actually been about freedom. On the contrary, as we have seen, free trade has a tendency to gradually undermine and ."

"[Securing] resources for large-scale economic transformational change [...] can be achieved by a government committed to subordinating markets in money, goods and services to regulatory democracy [...]. 'Free-market' neoliberal economic policies that detach markets from society's oversight achieve the reverse. They are designed to subject markets to private, not public, democratic authority."

"Government doesn’t "intrude" on the "free market." It creates the market. ... Those who argue for "less government" area really arguing for a different government – often one that favors them or their patrons."

"Whatever their limitations, Freud and Marx developed complex and subtle theories of human nature grounded in their observation of individual and social behavior. The crackpot rationalism of free-market economics merely relies on an abstract model of how people "must" behave."

"[N]othing against making money, but I know how money was made [in Serbia] during the '90s..."

"I am puzzled by this nostalgia. People say it was not so bad, that socialism was more human. But everyone was egalitarian in the former Yugoslavia because everyone was poor. Yugoslavia was a dictatorship."

"In the gift economy, gifts are not free. The essence of the gift is that it creates a set of relationships. The currency of a gift economy is, at its root, reciprocity."

"The exchange relationships we choose determine whether we share them as a common gift or sell them as a private commodity. A great deal rests on that choice. For the greater part of human history, and in places in the world today, common resources were the rule. But some invented a different story, a social construct in which everything is a commodity to be bought and sold. The market economy story has spread like wildfire, with uneven results for human well-being and devastation for the natural world. But it is just a story we have told ourselves and we are free to tell another, to reclaim the old one. One of these stories sustains the living systems on which we depend. One of these stories opens the way to living in gratitude and amazement at the richness and generosity of the world. One of these stories asks us to bestow our own gifts in kind, to celebrate our kinship with the world. We can choose. If all the world is a commodity, how poor we grow. When all the world is a gift in motion, how wealthy we become."

"A gift is the transfer of a good without an explicit specification of a quid pro quo. The good can be a tangible thing or money, but it also can be intangible, as in the form of time, attention, information or knowledge. A present is a gift and so may be the attention that one person ‘gives’ another, or the time that a person donates to an art institute as a volunteer. Usually a gift entails reciprocity: the giver expects something in return for the gift given. Friends expect friendly gestures in return for their friendly gestures; donors expect some form of appreciation or another; and those who give presents at Christmas expect to receive presents in return. The key to understanding the phenomenon of the gift is the nature of the reciprocity involved"

"Where feudalism is concrete and organic, with man dominated by the image of the land, capitalism is abstract and calculating in spirit, and severs man from the earth."

"Wars throughout history have been waged for conquest and plunder. In the Middle Ages when the feudal lords who inhabited the castles whose towers may still be seen along the Rhine concluded to enlarge their domains, to increase their power, their prestige and their wealth they declared war upon one another. But they themselves did not go to war any more than the modern feudal lords, the barons of Wall Street go to war. The feudal barons of the Middle Ages, the economic predecessors of the capitalists of our day, declared all wars. And their miserable serfs fought all the battles. The poor, ignorant serfs had been taught to revere their masters; to believe that when their masters declared war upon one another, it was their patriotic duty to fall upon one another and to cut one another's throats for the profit and glory of the lords and barons who held them in contempt. And that is war in a nutshell. The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and all to lose — especially their lives. They have always taught and trained you to believe it to be your patriotic duty to go to war and to have yourselves slaughtered at their command. But in all the history of the world you, the people, have never had a voice in declaring war, and strange as it certainly appears, no war by any nation in any age has ever been declared by the people. And here let me emphasize the fact — and it cannot be repeated too often — that the working class who fight all the battles, the working class who make the supreme sacrifices, the working class who freely shed their blood and furnish the corpses, have never yet had a voice in either declaring war or making peace. It is the ruling class that invariably does both. They alone declare war and they alone make peace. Yours not to reason why; Yours but to do and die. That is their motto and we object on the part of the awakening workers of this nation. If war is right let it be declared by the people. You who have your lives to lose, you certainly above all others have the right to decide the momentous issue of war or peace."

"[W]e have all heard how Mr. Cobden, who is a very eminent person, has said, in a very memorable speech, that England was the victim of the feudal system, and we have all heard how he has spoken of the barbarism of the feudal system, and of the barbarous relics of the feudal system. Now, if we have any relics of the feudal system, I regret that not more of it is remaining... Now, what is the fundamental principle of the feudal system, gentlemen? It is that the tenure of all property shall be the performance of its duties. Why, when the Conqueror carved out parts of the land, and introduced the feudal system, he said to the recipient, "You shall have that estate, but you shall do something for it: you shall feed the poor; you shall endow the Church; you shall defend the land in case of war; and you shall execute justice and maintain truth to the poor for nothing.""

"The principle of the feudal system, the principle which was practically operated upon, was the noblest principle, the grandest, the most magnificent and benevolent that was ever conceived by sage, or ever practised by patriot."

"Feudalism? Sometimes it referred to the power of an all-mighty Emperor to distribute favors; sometimes it referred to peasants who had no land or power; sometimes it referred to a hierarchy of obligations and duties; sometimes it referred to the old thinking where women were subjugated to men."

"Studying Russian history from the West European perspective, one also becomes conscious of the effect that the absence of feudalism had on Russia. Feudalism had created in the West networks of economic and political institutions that served the central state, once it replaced the feudal system, as a source of social support and relative stability. Russia knew no feudalism in the traditional sense of the word, since, after the emergence of the Muscovite monarchy in the fifteenth and sixteenth centuries, all landowners were tenants-in-chief of the Crown, and subinfeudation was unknown. As a result, all power was concentrated in the Crown."

"Under the feudal system, it was the duty of every great lord to serve the King in battle, bringing with him so many armed vassals, each of whom in turn brought so many lesser vassals of his own, and so on down the whole scale of hierarchy. Each vassal was bound by oath of allegiance to his own lord and to his own lord only, "while their lives should last"; consequently, if a great lord was killed in battle, his followers were automatically released from their allegiance; they could—and some did—retire from the conflict and take no more part in it. Similarly, if he was taken prisoner or fled from the field, they were left without leader and tended to disintegrate. Hence it was of enormous importance that a lord should lead his men boldly, fight with conspicuous bravery and (if possible) not get killed, or even unhorsed, lest his followers should lose sight of him and become discouraged. This is why Ganelon is so insistent that, if only Roland can be got rid of, the flower of the French army, most of whom are Roland's vassals, will melt away; and this is why, when Marsilion is wounded and flees, the whole Saracen army turns tail. Similarly, when, in the final great battle, the Emperor Charlemagne and the Emir Baligant, lord of all Islam, meet face to face, the whole issue of the war hangs upon their encounter. Baligant falls; and the entire Paynim army at once flees the field."