An article from The Atlantic, "Freedom For The Wolves," contradicts a basic premise of modern economic thought. It is popularly believed that "the freedom that matters most, and from which other freedoms indeed flow, is the freedom of unregulated, unfettered markets." I am quoting from the article.
That popular belief, that freedom flows from unfettered markets, is simply not true, or so says Joseph Stiglitz, author of that article I am referencing. Stiglitz is somewhat of an expert, having been awarded the Nobel Memorial Prize in Economic Sciences in 2001. Clicking on that title link in the first paragraph will take you to Stiglitz' article. No guarantees, though, that the paywall maintained by The Atlantic will let you through, actually to read it.
I do recommend that you try to read the entire article. Here is a brief excerpt, to give you the basic idea:
F. A. Hayek and Milton Friedman were the most notable 20th-century defenders of unrestrained capitalism. The idea of “unfettered markets”—markets without rules and regulations—is an oxymoron because without rules and regulations enforced by government, there could and would be little trade. Cheating would be rampant, trust low. A world without restraints would be a jungle in which only power mattered, determining who got what and who did what. It wouldn’t be a market at all.
Nonetheless, Hayek and Friedman argued that capitalism as they interpreted it, with free and unfettered markets, was the best system in terms of efficiency, and that without free markets and free enterprise, we could not and would not have individual freedom. They believed that markets on their own would somehow remain competitive. Remarkably, they had already forgotten—or ignored—the experiences of monopolization and concentration of economic power that had led to the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914). As government intervention grew in response to the Great Depression, Hayek worried that we were on “the road to serfdom,” as he put it in his 1944 book of that title; that is, on the road to a society in which individuals would become subservient to the state.
My own conclusions have been radically different. It was because of democratic demands that democratic governments, such as that of the U.S., responded to the Great Depression through collective action. The failure of governments to respond adequately to soaring unemployment in Germany led to the rise of Hitler. Today, it is neoliberalism that has brought massive inequalities and provided fertile ground for dangerous populists. Neoliberalism’s grim record includes freeing financial markets to precipitate the largest financial crisis in three-quarters of a century, freeing international trade to accelerate deindustrialization, and freeing corporations to exploit consumers, workers, and the environment alike. Contrary to what Friedman suggested in his 1962 book, Capitalism and Freedom, this form of capitalism does not enhance freedom in our society. Instead, it has led to the freedom of a few at the expense of the many. As Isaiah Berlin would have it: Freedom for the wolves; death for the sheep.
In fact, "freedom," if we are interested in establishing and maintaining it, is found in the "political" realm, not in the realm of economics. If we want "freedom," then we need to insure that "politics" prevails over "economics." "Politics" is the word we use to name the discussion and debate about what we should do, collectively, followed up by decisions, based on the debate, which then lead to action. "Politics" is how genuine "freedom" operates within our "common world."
"Economic" freedom means that those who have the most money get to make the rules. Sometimes, I have denominated this approach to "freedom" as the "Golden Rule" of politics. As that formulation suggests, those who "have the gold" do, quite often, "make the rules."
That's "freedom for the wolves," as Stiglitz says.
But we are not - at least not inevitably - the sheep upon which the wolves of wealth will have freedom to prey.
Not if WE, ourselves, get engaged in "politics." Not if WE make the rules!
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