The Problem With Markets: A Holiday Tale

“Like all human institutions, markets have strengths and weaknesses,” writes University of Massachusetts economist Richard Wolff. Exalting them as if they were some ideal mechanism for distributing resources “should be rejected as the self-serving tool of societies’ richest operated at the expense of everyone else.”

Wolff continues at Truthout:

Despite the pro-market ideology that suffuses capitalist cultures today, inside those cultures markets are sometimes reviled in revealing ways. A typical holiday scene illustrates the point. Some individuals are hosting a dinner; they have purchased, cooked and served the food to friends and relatives gathered at a festive table. All in attendance receive and enjoy their portions, conversation bubbles and solidarity glows. As the meal concludes, one young man is asked to clear the table. He proudly applies the market exaltation brought home from that semester’s college economics course. “Sure,” he says to all at the table, “that will be $4, please.”

Silence descends amid shocked intakes of breath. One of the hosts, red-faced, declares, “What an awful thing to do.” He explains sternly, “We are family and friends. We love one another and do kind things to express that love. Demanding money offends and undermines what brought us together. What do they teach in that overpriced college?”

This holiday host denounces the market as an enemy of love and solidarity. Might he eventually extend his critique of the market’s effects inside the home to include what markets do outside too? Modern societies mostly ban markets as mechanisms for distributing sexual services, organs for transplants and so on. Long ago, Plato and Aristotle criticized markets for polarizing rich versus middle and poor, breeding envy and thereby undermining the social cohesion that sustains community. Might people recognize that ancient Greek wisdom again?

Markets contributed the incentives and frameworks recently for Volkswagen to sell over 11 million air-polluting vehicles by deceiving buyers and government regulators. Markets did the same for GM to delay correcting fatal ignition flaws, for Toyota to delay correcting fatal airbag flaws, and for Whole Foods to overcharge New Yorkers and Californians (and how many others?) for packaged food. Every month, Consumer Reports magazine describes profit-driven companies grabbing opportunities to charge more for less in the markets they “serve.” Across the United States, every state has commissions to supervise utility and insurance capitalists because their self-serving “market behavior” hurts the public and it responded with those commissions. […]

Markets stimulated and rewarded the proliferation of financial “products” (asset-backed securities, collateralized debt obligations, credit default swaps and so on) that helped plunge the world into the severe downturn since 2007. The United States’ “market-based” health-care system is partly why we get mediocre health results despite spending far more on health care than other advanced industrial economies. The booming market in illegal drugs yields major social problems in cities, prisons, ghettos and beyond. The capitalist organization of production coupled with the market system of distribution has delivered many disastrous results for modern society.

Continue reading here.

— Posted by Alexander Reed Kelly.