Monday, September 21, 2015
Three Questions About Free Market Economics
I stopped reading The Economist, and that makes my weekends somewhat free. For fifteen years, since the time I first left India and went on to live in Dhaka, fetching it from the shop and reading it from cover to cover was part of my Friday routine. There were early disappointments - such as its blood-curdling advocacy of the Iraq War, which clearly exposed its Western bias - but it was one essential viewpoint that I needed to understand the world.
However, I increasingly found it disagreeable for its fundamentalist approach towards Free Markets. This is not a political left / right thing. Though I am openly delighted by the election of Jeremy Corbyn as the Labour leader, who I consider to be a vast improvement over the careerist politicians we see all around (alas, one of my favourite writers, Tristram Hunt, turned out to be one of them), I would like to think that I support free markets if they are really free. These are indeed my points of agreement with The Economist - we are on the same side in terms of open approach to immigration as opposed to David Cameron's political opportunism - and the reason I read it week after week is to enable my exploration what makes markets really free.
And, this eventually became a point of departure. The Economist, founded to enable free market thinking, turned out to be less exacting in its approach to the world than it claims to be. Anything that liquidates the state - sale of public assets is something that they advocated, before the recently fashionable trend got under way - found its support. It took on itself the cause of advancement of American foreign policy, which, from my instinctive identification with Global South, looked completely misdirected. And, therefore, despite the great amount of time I continued to devote reading it, it failed to answer the three key questions that I grapple with everyday.
First, in context of the supposed panacea of the Free Markets, the question would be - Can markets be really free? I have noted that Free Market advocates are very much like the Marxists - if one could point to any empirical evidence that works against their theory that Free Markets solve all problems in the long run, they shrug and say that markets are not really free in that case. In summary, they take just the stance that the advocates of Perfect Government take - everything was hunky-dory but then Stalin came along - and while they think they are defending their thesis, they are really just proving that their solution is just as unreal as the other party. The stance of journals such as The Economist is more nuanced - they argue that free market is indeed the solution but it does not exist yet, and therefore, it is working tirelessly towards it. Apart from being Utopian, Marx would have been in complete agreement, this overlooks the reality of human institutions that must operate with compromises and adjustments, in a less perfect world. It presents a binary between governments and markets, and deliberately or not, obfuscate that governments enable markets and the nature of the markets are closely reflected in the nature of governments.
Second, a part of this free market thesis is the idea of the flat world. The vision of the world from this corner is a world of free movement of goods, capital and people, with a few powerful nations keeping peace. But, then, as someone like me, growing up in India, know, flat does not mean a level playing field. The world system is highly tilted, the peacekeepers in the scheme of things are as rapacious as their positions will allow, and the borders are real when one has to cross over from, say, Syria to Hungary. The Economist and its ilk would shake off such problems as aberrations, temporary distortions in a world of free trade. However, anyone with slightly more perspective would perhaps know that this is not going backwards, this is just an ugly moment when reality dawns on us. The illusion of the free market exists only if you diligent read The Economist every weekend - consider that the dose of opium that the Chinese young men needed to keep their eyes shut as their world fell apart - but otherwise, in the harsh realities of a country like India, the world is only getting more divided and more desperate.
Third, the humanitarian tone of Free Marketeers is obviously misplaced. The Economist may celebrate week after week people coming out of poverty, and ISIS as the handiwork of few wicked men, but they fail to make the connection between the transformation of the traditional world and the disaffection that is currently sweeping not just the Middle East but also Africa, Asia and Latin America, as well as parts of Europe. This is about people discovering the false promise of the free markets, the tilted playing field, the harsh facts of client governments and the rigged democracies fostered upon them. The humanitarian interventions of the West, which strangely looks like bombing whole cities aflame, have disabused people what the English word is supposed to mean. And, indeed, the free market ideologues got their priorities backwards - they are willing to incur human costs for perfection of the markets, rather than incurring market costs for the benefit of humans (their argument that this is for the long term counter their own stance that in the long term, we are all dead) - and this is plain to everyone who have stopped reading The Economist (and Wall Street Journal, and the like).
I am not sure I want to find a journal to replace The Economist, and I have taken on reading Isiah Berlin in the meantime. Here is one commentator who recognise the limitations of human ideas and imperfect nature of human institutions. Berlin, the great advocate of human liberty, would recognise the costs and trade-offs of liberty. He is not a cheerleader of free market in the abstract, and he does not confuse the freedom to buy with freedom to think or freedom to be. In his construction, there is a plurality of goals that human beings could pursue - and they may not be compatible to one another. This, in its directness as well as its nuances, is closer to my own instincts about how to live, and it clarifies those three questions. It allows me to see the impossibility of perfectly free markets and perfect governance, and that intentions and ideas matter more than ideals. It allows me to see the lack of freedom that the supposed Western freedom bring to many nations, including the slapping of the label - emerging markets - that goad them to priortise on economic growth at all cost. And, it allows me to put Humans first - this is not any woolly goal of national happiness and rather a way of making decisions on the basis of human impact - and arrange my world accordingly.
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How To Live
"Far better it is to dare mighty things, to win glorious triumphs even though checkered by failure, than to rank with those poor spirits who neither enjoy nor suffer much because they live in the grey twilight that knows neither victory nor defeat."
- Theodore Roosevelt
- Theodore Roosevelt
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
- T S Eliot
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