The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers by Michael Perelman Page B
Authors: Michael Perelman
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back into insolvency in 2008, surviving only by virtue of massive government bailouts and a Federal Reserve madly pumping liquidity into the economy.
Off with the Golden Straitjacket
Little of the gold in the Golden Straitjacket that Wriston and Friedman propose will accrue to ordinary people. The regime they advocate makes progressive political processes impossible. In this new hyperactive market environment, governments are reduced to merely ratifying corporate desires, including corporate bailouts for the likes of Wriston’s bank.
Many governments forced to cede power to the Golden Straitjacket are corrupt and oppressive. Because of the unpopularity of neoliberal policies, corruption is often necessary to induce leaders to impose neoliberalism on their people. Of course, Procrusteans are less outraged by corruption than by a government that responds to the wishes of its people or, even worse, allows people to give voice to their own desires.
For example, in 2005, after the French people decisively voted down a neoliberal constitution of the European Union, Friedman smugly ridiculed their choice in terms usually reserved for impoverished Third World countries. The French were unrealistic in expecting to preserve their thirty-five-hour workweek, while hardworkingmen and women in India were enthusiastically embracing global capitalism. 10 So much for voluntarism!
From the perspective of Friedman and Wriston, the behavior of the French regarding the length of their workday was proof that common people are incapable of understanding what is in their best interests (in contrast to the rationality ascribed to them in their role as consumers). In the end, markets, and markets alone, are capable of directing behavior in ways that ensure economic progress.
Yet Friedman and the people whose ideas he echoes would be hardpressed to find an example of a country in which a majority of the people benefited from the dismantling of social controls. None of the great economic successes—Great Britain, the United States, Germany, or Japan—were willing to rely solely on markets to fuel their economic development. Industry in the United States developed with the help of protective tariffs, subsidies, and government contracts, not to mention the slaves and the government-subsidized railroads. The Golden Straitjacket might be appropriate apparel for King Midas, but not for a free people.
I should note that even many free market economists, especially after the Asian currency crisis of 1998, now realize that the Electronic Herd is hardly a rational arbiter of human well-being. The recent financial crisis brought that lesson closer to home. Like most herds, Friedman’s Electronic Herd is prone to stampeding, and when it does it is liable to trample whole economies, imposing great harm on a large share of their population.
Yet after a severe crisis, the Procrusteans dogmatically call out for more of the same: if an economy is to restore its profitability, it must make adjustments. Here again, those who pay the price for the mistakes of the Electronic Herd are the common people—especially at the workplace, where they experience lower wages, harsher working conditions, or unemployment. As wages shrink and profits soar, the economy appears to become more productive—at least to the Procrusteans.
Tightening the screws in one country sends shockwaves throughout the world. Other nations must meet the competitive challenge thatthese supposedly more productive economies present, making domestic adjustments of the Procrustean bed an international phenomenon. We can see both the recent French effort to increase the workweek and, less dramatically, the steady, decade-long pressure imposed on workers in the United States as examples of the force of international Procrusteanism.
Even if we ignore the historical evidence about the fallibility of the Electronic Herd, why would people behave differently in economic and political venues? Are
Off with the Golden Straitjacket
Little of the gold in the Golden Straitjacket that Wriston and Friedman propose will accrue to ordinary people. The regime they advocate makes progressive political processes impossible. In this new hyperactive market environment, governments are reduced to merely ratifying corporate desires, including corporate bailouts for the likes of Wriston’s bank.
Many governments forced to cede power to the Golden Straitjacket are corrupt and oppressive. Because of the unpopularity of neoliberal policies, corruption is often necessary to induce leaders to impose neoliberalism on their people. Of course, Procrusteans are less outraged by corruption than by a government that responds to the wishes of its people or, even worse, allows people to give voice to their own desires.
For example, in 2005, after the French people decisively voted down a neoliberal constitution of the European Union, Friedman smugly ridiculed their choice in terms usually reserved for impoverished Third World countries. The French were unrealistic in expecting to preserve their thirty-five-hour workweek, while hardworkingmen and women in India were enthusiastically embracing global capitalism. 10 So much for voluntarism!
From the perspective of Friedman and Wriston, the behavior of the French regarding the length of their workday was proof that common people are incapable of understanding what is in their best interests (in contrast to the rationality ascribed to them in their role as consumers). In the end, markets, and markets alone, are capable of directing behavior in ways that ensure economic progress.
Yet Friedman and the people whose ideas he echoes would be hardpressed to find an example of a country in which a majority of the people benefited from the dismantling of social controls. None of the great economic successes—Great Britain, the United States, Germany, or Japan—were willing to rely solely on markets to fuel their economic development. Industry in the United States developed with the help of protective tariffs, subsidies, and government contracts, not to mention the slaves and the government-subsidized railroads. The Golden Straitjacket might be appropriate apparel for King Midas, but not for a free people.
I should note that even many free market economists, especially after the Asian currency crisis of 1998, now realize that the Electronic Herd is hardly a rational arbiter of human well-being. The recent financial crisis brought that lesson closer to home. Like most herds, Friedman’s Electronic Herd is prone to stampeding, and when it does it is liable to trample whole economies, imposing great harm on a large share of their population.
Yet after a severe crisis, the Procrusteans dogmatically call out for more of the same: if an economy is to restore its profitability, it must make adjustments. Here again, those who pay the price for the mistakes of the Electronic Herd are the common people—especially at the workplace, where they experience lower wages, harsher working conditions, or unemployment. As wages shrink and profits soar, the economy appears to become more productive—at least to the Procrusteans.
Tightening the screws in one country sends shockwaves throughout the world. Other nations must meet the competitive challenge thatthese supposedly more productive economies present, making domestic adjustments of the Procrustean bed an international phenomenon. We can see both the recent French effort to increase the workweek and, less dramatically, the steady, decade-long pressure imposed on workers in the United States as examples of the force of international Procrusteanism.
Even if we ignore the historical evidence about the fallibility of the Electronic Herd, why would people behave differently in economic and political venues? Are
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