The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers by Michael Perelman

existed for many centuries. On the teeming streets of the slums of poor countries, you are likely to see what Adam Smith once called “the pedlar principle of turning a penny whenever one was to be got, “a phenomenon he credited with initially setting capitalism in motion. 2 More recently, Sol Tax termed the same activities “penny capitalism”: desperately poor people hawking cheap goods to other desperately poor people. 3 Penny capitalists can be efficient, but they are not likely to accumulate any capital. Tax’s University of Chicago colleague, Nobel Prize–winner Theodore Schultz, suggested that traditional agriculture was efficient, just not very productive in terms of the market. Given the available technology, the peasants produced as much as possible, but, despitetheir efficiency, they were destined to be trapped in poverty. Schultz argued, something naively, that all they needed to prosper was access to capital. Instead, once capitalism gets rolling in these countries, always with the help of force and violence, as was true in the developed countries, indigenous penny capitalism collides with global capitalism and dollar diplomacy. The outcome is never in doubt, as the harried street vendors know.
    The Golden Straitjacket
     
    The ideologists of international Procrusteanism propose their own version of Margaret Thatcher’s cruel pronouncement: “There is no alternative.” The
New York Times
commentator Thomas Friedman has developed his own special brand of giddy promotion of the corporate-market economy, while explaining that the hardships it imposes on ordinary people are unavoidable.
    Probably unintentionally echoing the
Communist Manifesto
, Friedman proposed that sovereign countries have no choice but to adopt what he calls “the Golden Straitjacket.” Friedman fails to mention that though this Golden Straitjacket might be golden for those at the top of an economy and to a lesser extent for some of the more fortunate of the middle class, it is anything but golden for the masses of people. In the words of the ever-effusive Friedman:
To fit into the Golden Straitjacket a country must either adopt, or be seen as moving toward, the following golden rules: making the private sector the primary engine of its economic growth, maintaining a low rate of inflation and price stability, shrinking the size of its state bureaucracy, maintaining as close to a balanced budget as possible, if not a surplus, eliminating and lowering tariffs on imported goods, removing restrictions on foreign investment, getting rid of quotas and domestic monopolies, increasing exports, privatizing state-owned industries and utilities, deregulating capital markets, making its currency convertible, opening its industries, stock, and bond markets to direct foreign ownership andinvestment, deregulating its economy to promote as much domestic competition as possible, eliminating government corruption, subsidies and kickbacks as much as possible, opening its banking and telecommunications systems to private ownership and competition, and allowing its citizens to choose from an array of competing pension options and foreign-run pension and mutual funds. When you stitch all of these pieces together you have the Golden Straitjacket. 4
     
    Friedman would have done his readers a service if he had mentioned that the Golden Straitjacket does not sweep aside all subsidies, kickbacks, and corruption—only those that impede the control of multinational corporations. In fact, the multinational corporations remain largely immune from the restraints of the Golden Straitjacket.
    Friedman goes on to mention that the same process that created the Golden Straitjacket unleashed what he calls the “Electronic Herd”:
The Electronic Herd is made up of all the faceless stock, bond and currency traders sitting behind computer screens all over the globe, moving their money around with the click of a mouse from mutual funds to pension funds to emerging market