Republican's "no regulation" ideology is dead - dead, dead, dead. As someone knowledgeable recently put it, trying to have an economy that has no rules is like playing a game of pick-up basketball with no referees: things are bound to get out of hand. The idea that economic forces will somehow magically regulate themselves is akin to believing in unicorns and fairy dust. Laissez-faire ideology is a myth, based on a fantasy, built upon a misunderstanding, all of which have been proven ever so wrong by the financial events of the recent past. And anyone who tries to claim that this is not all an apparition is delusional and not willing to look critically at their own belief system.
The idea that less regulation is better is actually a cover for allowing business owners to cheat, lie and steal their way to fortune. The less regulation there is, the more that cheating, lying, and stealing will occur. "But no," you say, "why would the business owners do that? They want to make money the legitimate way." Why they would do that is because nothing is stopping them, when there are no regulations. There are no laws to break, and no accountability to speak to, so why not cheat lie, and steal? "Well," your answer might be, "the government should not make rules and regulations, because the free market regulates itself." How does that occur, I would like to know? "You see," this is you again, "the invisible hand of the market place always sets things straight. Lying, cheating, and stealing is bad business. A business like that will lose its customers, through its bad reputation, and so it is in its interest to stay on the up and up, to develop a sound reputation, and to built its clientèle through honest business practices."
But there you go with your fairy dust, again. For that is precisely how crooks set up their scams. They pose as legitimate business people, gain everyone's trust, and then, when enough people have invested in their scheme or lent them enough money based on their sterling reputation, they run off with all the dough. Or, they can trim personal profits off of the books all along, having convinced everyone to trust them, so that no one looks into their financial dealings. Everything seems to be hunky dory, that is, up until someone wants the money that they had put in back, and it is discovered that the money has evaporated. Or, the product that is being sold is inferior or defective in a way that does not become apparent for some time, such as when someone ends up dying, and it turns out that the company knew all along that their product will eventually cause someone's death, but chose to continue to make a profit off of it, anyway.
These cases are not the exception, they are the norm, and the only things that prevent more of this from happening are the regulations that are in place. Tragically, our United States government has been under the influence of "no regulation" ideology for nearly three decades now, ever since President Ronald Reagan said, "Government is not a solution to our problem. Government is the problem." With that, a movement swept the nation, and those who are supposed to make government work have been systematically sabotaging government programs so that they are underfunded, understaffed, overruled, stacked with allies of the businesses they are supposed to be regulating, and weakened, all so that the claim can be made that those institutions don't work and should be eliminated. The truth of the matter is that the regulating bodies have not been allowed to work properly, because the businesses that lobby the government officials have bought them off, and convinced them that the business world will regulate its own self.
Now, part of the reason for the prominence of this ideology has been because of lobbyist corruption of the system that is supposed to protect consumers and citizens. Another part of the reason has been because of Ayn Rand, Horatio Alger, and Milton Friedman. Ayn Rand was a fiction writer who perpetrated the myth that business leaders have the purest intentions, the strongest work ethics, and unquestioned moral authority over the rest of society, because they have risen to power through the system of Social Darwinism, which makes them intrinsically the best that humanity has to offer. This is why I have stated that this ideology is a myth based on a misunderstanding. The problem with this scenario is that Social Darwinism does not really exist. It is a misappropriation of a natural phenomenon, the survival of the fittest, to the arena of human endeavor. The difference between the realm of nature and the realm of social behavior is that the laws of nature are universal, existing through the same physical and biological forces throughout the planet. Living beings adapt themselves to these forces, the weakest fail to survive, while the strongest live to perpetuate their genes. Whole ecosystems develop, where all of the living beings find their niche, and all are interconnected within the systems.
Within human societies, however, the universal laws of nature no longer apply. The human race long ago fought its battles among the other living creatures, and having risen to the top of the food chain, we began to build societies, based on the exchange of money for goods and services. Within the larger realm of nature, we created an entirely different, man-made realm, with different laws and forces. This system is based on power and resources, with sprinklings of the force of human perception interspersed for good measure. The notion that those at the top of the human pyramid are indeed the fittest has been perpetrated throughout human history by those same people as a matter of perception, so that they may hold on to their power and resources, so that the masses that they rule over will not join forces and overthrow them.
Our founding fathers attempted to reject those very perceptions, stating that “all men are created equal” in order to deny the claim by monarchs that they are more special than everyone else. Unfortunately, family dynasties and the tyranny of Big Business were not also rejected with the founding of this nation, as the land-owners and business leaders set themselves up to retain as much power as possible within the new democratic system. Slavery, indentured servitude, child labor, disenfranchisement, and other abuses and denials of democratic rights continued, in direct opposition to those enlightened words. And the new power structure was maintained through manipulations of perceptions, such as the popular fictions of Horatio Alger that caused the poor and abused to believe that they had a chance at joining the rich and powerful with his rags to riches stories, and later, the popular fictions that champion the business leaders over the workers as a kind of natural order as dreamed up by Ayn Rand.
Then there is Milton Friedman. Although he and his followers wouldn't have and still won't admit it, he was also a fiction writer. His economic theories are the source of much of the fairy dust that the “no regulations” gang champion, as he connected capitalism with freedom, and used phrases like “free to choose” to promote his radical ideology. The crux of this free market ideology is indeed Friedman's belief that the freedom of a people cannot exist without free and unfettered capitalism, that it is free markets, which, according to the (now debunked) natural forces of the marketplace, will naturally regulate themselves, that are the deepest expression of free people, and that freedom of choice underlies all other freedoms that uphold the human spirit.
Sounds nice, but what are the real consequences of such a viewpoint? What underlies the belief that free markets are equal to free people, and that freedom of choice automatically results in a system where only the cream rises to the top, only the best ideas survive, and only the most capable people become business leaders, worthy of their huge salaries and compensation packages? Well, we have seen the consequences of allowing the financial institutions run amok, and even Alan Greenspan, a true believer in Friedmanian free market capitalism, expressed surprise that the system did not regulate itself the way he thought it was supposed to. The supposed financial wizards at the top of that pyramid simply allowed their institutions to practice riskier, more and more complex, and absolutely unsound bundling and trading of financial instruments that no one understood, that were not kept track of, and that were generating wealth out of thin air, so that when investors did start to look into things, the whole stack of cards came tumbling down, dragging our whole economy as well as the rest of the planet down with it.
Could it be that greed overtook reason? Everything was fine and everyone was happy, as long as more and more fake wealth showed up on the books. Does it make sense that the CEO's of these companies, who allowed this all to happen, are not being held to account for their failures? Does it make sense that these CEO's all sit on the board of directors of each other's companies, so that their salaries and benefits are all decided amongst themselves, and are thus divorced from any actual accountability to the performance of their companies? The shareholders are supposed to hold them accountable, but they have been hoodwinked by the perception that the CEO's must be paid “competitively,” which somehow magically attracts only the best and brightest to those positions. No one seems able or willing to point out that their emperors are wearing no clothes, that they have been royally scammed, and that the free market system has failed them miserably. All those people who cleared off their desks when they were fired from their jobs at those financial firms simply went home to lick their wounds, too embarrassed to admit to themselves and their families that they are victims of this elaborate illusion.
As for what underlies this free market belief system, part of it I have already covered, the false notion that survival of the fittest applies to human society. But because many people are shut out of the system, because of bigotry, economic disadvantages, and other lack of fair access to the halls of power, this is a myth (see my article on competition for more on this). Another problem that I see with this belief system is that the connection that Friedman made between capitalism and freedom is tenuous, at best. Capitalism, in and of itself, does not guarantee freedom. An interesting example of this is the current situation in China, a communist state, but which has been adapting capitalist elements in order to raise itself to a higher status in the world power structure. This may have been raising the living standards of the Chinese people somewhat, but it hasn't stopped the government from maintaining its totalitarian grip on freedoms, such as its one-child policy, its total control of the media, or its involvement with the very industries that it is allowing to benefit to some degree from capitalist practices. While it seems to be striking an intriguing balance between capitalism and socialism, it has not let up on its totalitarian governmental structure. Furthermore, while in our society, more wealth generally engenders more “freedom” because it gives an individual more power, in a closed society like China's, this relationship might not hold true. More wealth might beget a higher standard of living, but not more freedom.
This example highlights an important distinction that must be made regarding the term, “capitalism,” and that is that it is a purely economic term, which stands wholly separate from political terminology such as “democracy,” “monarchy,” or “totalitarianism.” “Capitalism” belongs in the category of terms that describe economic systems, such as “communism,” “socialism,” and “fascism.” These terms are actually quite complicated and not very well understood by our culture, as they are also used to describe the political systems that utilize them, and close examination reveals that these economic methods can actually overlap each other. Just as capitalism has been seeping into Chinese communism, I believe that fascism has been creeping into our capitalism.
In fact, those who are worried that socialism is seeping into our capitalist system because of the recent government bailout of the financial industries have misunderstood these terms. This is not an example of socialism at all. Socialism is the redistribution of wealth throughout society, something that the holders of wealth are not in favor of. Transferring public wealth upward, on the other hand, is fascism, where the business leaders join forces with the government, of whatever type that might be, to use their wealth and power in the name of the “national interest.” Fascism embraces capitalism wholeheartedly, but is very sneaky and disingenuous about the relationship between the government, the business leaders, and the workers. Fascism also traditionally twists the terms “freedom” and “equality” all around, claiming that its citizens will be free and equal in a strong state, as expressed through the strength, cohesiveness, and purity of the state itself, and that this justifies the elimination of all dissent within the state.
Here is a quote from the Mussolini's Doctrine of Fascism to this point: “Fascism reasserts the rights of the State as expressing the real essence of the individual. And if liberty is to he the attribute of living men and not of abstract dummies invented by individualistic liberalism, then Fascism stands for liberty, and for the only liberty worth having, the liberty of the State and of the individual within the State. The Fascist conception of the State is all embracing; outside of it no human or spiritual values can exist, much less have value.”
My point is that it behooves us all to study history for ourselves, and to pay attention to how terms are used, especially emotionally charged terms such as “freedom” and “liberty” and “equality.” The Doctrine of Fascism is full of such misuses of terminology, and it strikes me as very similar to the unsubstantiated equation of “freedom to choose” in the context of economic theory with democracy. Democracy is defined as government by the will of the people, with the freedom to choose their leaders instead of having their leaders imposed upon them. But to then carry that concept to the grocery store shelves takes the whole idea out of context. Having one hundred and four different kinds of cereal on the shelf, all produced by just a few of huge consumer product conglomerates, namely, General Mills, Kellogg's, Nabisco, Post, Quaker, and Purina, is not really freedom. It is just an illusion of freedom.
In fact, it is just an illusion of choice, since they are all full of the same, basic, mass-produced ingredients, especially that high-fructose corn syrup. And that particular ingredient is ubiquitous throughout the grocery store shelves, as anyone who shops for a diabetic will know, as are those same corporate labels. We seem to have become enslaved to high-fructose corn syrup. We are even pouring a similar corn product, ethanol, into our gas tanks. Yes, we have a choice, to drive away from the pump and find another oil company to throw our money at. But a real choice would be to have available more battery-operated cars, or electric hybrids, or some other kind of viable transportation option. These choices should be available by now, as ideas about new energy options have been floating around for decades, yet the oil companies and the car companies, with the help of our government, chose to literally hold us over the barrel by not investing in these options, instead, choosing to spend millions of dollars on their campaigns to deny that global warming even exists, to lobby the government to have gas mileage standards weakened, and to continue to push their highly-profitable, all-American, gas-guzzling trucks and SUV's.
Real choice would, by the way, include more political parties to chose from, a socialist party, and a conservative party, and a green party, and a libertarian party, and these parties would hold seats in Congress and represent citizens and their varied political and economic interests. Of course, that would mean that we would need a real democracy, where citizens would hold the same rights and privileges that corporations hold, to free speech, equal access to our elected leaders, and the right to declare bankruptcy... but that is a topic for a whole other essay. Suffice it to say that the “no regulations” ideology has been outed as the fiction that it is, and let us move what democracy we have forward to help us all get through these difficult economic times to come, first and foremost by putting the government back to its job of governing, and putting an end to this nonsense about the private sector magically regulating itself according to what it decides that consumers want, as if human greed and underhandedness did not exist at all.
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