Monday, November 21, 2011

The Myth Of The Free Market, Part II: Steve Forbes Needs His Cranium Occupied

By Manifesto Joe

Recently, Steve Forbes joined Sarah Palin in saying something to the effect that the Occupy protesters need to go occupy Congress, not Wall Street. According to reports, the one-time Republican presidential candidate said that the protesters need to protest cumbersome regulations that he believes stymie business and seem intended to destroy the financial industry (Huh? Does he mean the one that was so unwisely deregulated during the late 1990s?)

Most of those who know Forbes' history, I'm sure, realize that this is yet another fool who, to paraphrase Jim Hightower's line about George H.W. Bush, was born on third base and thinks he hit a triple.

Forbes personifies all that is corrupt and twisted about the current system of rigged games, and the privileges that the system's 1% beneficiaries have the absurd nerve to deny that they have.

During his first campaign for president, which fortunately didn't go far, Forbes proposed a flat tax of 17%, and even suggested that the first $33,000 of a family income could go untaxed. That lured in an awful lot of uninquiring minds. I remember talking to a small-business owner who thought Forbes' idea was just wonderful -- until I explained to him what the catch was.

In the Forbes plan, income from dividends and interest, pensions, and capital gains would all be exempt from any and all federal taxation. For the most part, I just described what makes the difference between a very wealthy person and one of more modest means.

My friend hadn't heard that part, and had to back down and say, "You're right." I told him that a modified flat tax probably isn't such a bad idea, at least compared with the convoluted mess we have now. But the Forbes plan clearly wasn't the right one. I recall even Pat Buchanan, nobody's bleeding heart, commenting caustically that Forbes' plan sounded like something the boys in the boardroom would come up with.

What Forbes personifies is ironic -- he's the most dogmatic of "free-market" advocates, yet he represents all about the so-called free market that is, for all practical purposes for the vast majority of people, a joke and a hoax.

The U.S. is a plutocracy, not a democracy or even a republic

I've heard a lot of argument back and forth about whether the U.S. was constitutionally designed to be a "democracy" or a "republic." I'd have to say that it's supposed to have been some of both, or what could be described as a "democratic republic." It was obviously meant to be a "republic" inasmuch as our government is largely representative, divided and subject to certain checks and balances, as opposed to a "direct democracy." There are many democratic features in the system, but our founders seemed to clearly have the concept of the "tyranny of the majority" in mind.

But in 1787, when the Constitution was drafted, the country was largely composed of yeoman farmers and small-business people. Women didn't have the vote, and black people -- well, the proposition that they were even people was often a minority opinion among whites. In much of the nation then, they were property.

Much has changed since those days, some very much for the better, and some very much for the worse. Corporations have attained a supremacy over the economy (not just ours -- the world's) that even the visionaries of the 18th century might not have imagined.

Money is officially considered speech

Two rulings by the U.S. Supreme Court have pretty much established plutocracy as our obvious form of government. The first, Buckley v. Valeo, came in 1976. Here's a link to a Wikipedia article on this ruling.

The second ruling was in 2010, Citizens United v. Federal Election Commission. Here's yet another link to a Wikipedia article on this ruling.

The general effect of these rulings, in tandem, was that in America, money is speech, and for all practical purposes, elections can be bought and sold, as though public offices were on the marketplace.

It has, of course, become quite clear to some of us that they are. Obama perhaps thought he could change things, but he ran up against that nasty and hard brick wall that is Corporate America. Wall Street more or less controls both major political parties, and its agents seem to have an awful lot of pull on Obama himself, whether he knows it or not.

Why does the myth of the "free market" persist?

It's very simple: People find this ideology to be very profitable in certain places and circumstances. Supply-side and "free market" theorists can be proved wrong again and again, but as long as some people find this ideology supremely profitable, they will embrace it, without reservations, and can find plenty of economists to rationalize it.

There's a great irony in all this. "Free market" thinkers point to the need for incentives, and the will to power and wealth, as defenses for their viewpoint. Where they go wrong is in thinking that, when you have a lot of people living by this philosophy, an "invisible hand" tends to move self-interest in a socially productive direction, toward competition and hard work that is supposed to ultimately benefit all who live in such a society.

I have felt that "invisible hand" many times. It always felt much more like a fist to me.

The inexorable lure of people toward a position of great wealth and social dominance lays waste to the very thing that is supposed to make this ideology work. Capitalism thrives on competition, yet every capitalist wants a monopoly. The practitioners of the system are generally opportunists who will do what is necessary to establish that arrangement, even if it involves breaking a few rules. And it's especially convenient if they can arrange things in such a way that it's all quite legal and accepted as good and standard business.

And so, Steve Forbes, and Sarah Palin -- the temptation to rig the game so that the supreme competitors can win, over and over, is far too great. That is where lobbyists come in, and where the ultimate codification in favor of the winners happens over and over. The politicians become the "enemy" only when they stubbornly fight in favor of the public interest. More often, they are the stooges and dupes who do the bidding of the fat-cat "winners" such that the public loses much more often than it wins.

The real road to serfdom

We in America have been on it, for over 30 years. Only recently has a genuine grassroots movement emerged in which those brutally marginalized by the system have the nerve to stand up on their hind legs and say no. They finally see that the financial system has been a game rigged in favor of the so-called winners, and against them. They've finally seen that the misbehavior of the financial industry, with its subprime mortgages and derivatives and such, amounts to a tiny minority of privileged people using other people's money in order to rake in more and more money for themselves.

Unfortunately, not enough Americans see this, just yet. When you've got an economy that has doubled in size in 30 years, and yet the wages and salaries of the middle and working classes have stagnated, the purpose of this game should be obvious. But the "winners" have a propaganda apparatus that is unprecedented. There's an entire "news" empire -- no need for me to identify it -- that keeps spooning this bilge out to millions every day.

The first and most important way to fight back is to reject the ideology. It doesn't involve having to embrace "communism," as "they" would have you believe. Just say NO -- stop heeding. Listen, but with a critical mind, and a knowledge that the people who have profited most off this system for 30 years want to keep it going for at least 30 more. That's more than half the battle.

Manifesto Joe Is An Underground Writer Living In Texas.

1 comment:

Jack Jodell said...

Manifesto Joe,
I commend you for this outstanding post, brimming with obvious truth as it is. We DO live under a plutocracy - there can be no mistaking that! These pinheads like Palin, Forbes, and the entire current Republican Party are so clueless, they can't see beyond the end of their very short, very selfish noses. As long as THEY are employed and are making good money, to hell with anyone else. The system works just great for THEM, so why bother changing it? As the growing number of dissatisfied people hit the streets to protest, it is becoming very apparent to anyone with eyes, ears, and a brain how badly in need of overhaul this corrupt and dysfunctional system truly is.

I LOVED your analogy of the "invisible hand" of the supposedly "free" market being in actuality a FIST. To some, it would appear to be a fist with brass knuckles!

Palin is an idiot. Congress, dysfunctional as IT is, is not the problem. Unbridled greed at the very top of the income ladder is the real problem. It will only be rectified if we, the overwhelming majority of the country, OCCUPY THE VOTING BOOTH in 2012 and throw out ALL of these reactionary Republicans, Tea Party extremists, and complacent, weak "blue dog" Democrats and replace the entire lot with PROGRESSIVE, FORWARD-THINKING replacements! We need a massive upheaval like we experienced in the elections from 1930-1936. Then and ONLY then will we see the necessary and beneficial changes this country so desperately needs!