View source for The Tyranny of the Market

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[[Category:Angus Sibley]]
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[[Category:Tyranny]]
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{{DES | des = Angus Sibley's outline of the threats from libertarian (free-market) economics.  "According to free-market dogma, we must accept passively the dictatorship of the market." | show=}}
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The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists. 
Joan Robinson (1903 - 83), professor of economics at Cambridge (England)

The conservative individualist will never concede hegemony to the institutions of the market. The market is made for humans, not humans for the market.
John Gray, Beyond the New Right (Routledge, London & New York, 1993) p 63

According to Adam Smith, when individuals work for their own interests, they generally serve the interests of society. This is a very seductive hypothesis, sometimes true, but too often false. 
Joseph Stiglitz, The Roaring Nineties (Norton, New York, 2003)

Here we look briefly at some landmarks in the terrain we shall be exploring in the coming months.

The free-marketeers' contempt for the producer

The theory of the libertarian (free-market) economists insists that the consumer must always be king; workers and capitalists exist only to do his pleasure. In practice, as well we know, it is often the capitalist rather than the consumer who dominates. But there is no doubt at all as to who comes third and last in the deregulated free-market economy. That is the producer: the worker, tradesman, professional, or manager, except for the top level of management. For the benefit of consumers and capitalists, all these find themselves squeezed by the steamroller of unrestrained competition.

Not surprisingly, therefore, wherever in the world the principle of maximum market freedom has taken hold, the situation of the producers has deteriorated.

Clearly, we are all consumers. Yet most of spend much of our lives working as producers. Even when we are not working, as children we depend upon working adults; when retired (or unemployed), we live on benefits paid for by payroll-based contributions. Thus we are all in the producers' as well as in the consumers' camp. What then is the point of an economic strategy that panders to the consumers and bleeds the producers?

The worship of competition

According to Milton Friedman (1), the more unfair competition, the better. Here is a basic doctrine of the free-marketeers. Competition, they say, is such a good thing that we cannot have too much of it. Now, it would be stupid to maintain that competition is not good; it is indeed necessary for a healthy economy. However, like most good things, it is best taken in moderation. In excess, it is harmful.

That is an obvious, commonplace principle, is it not? Yet economists refuse to accept that it applies to competition. They want maximum intensity of competition always and everywhere. Under their influence, the law has come to treat almost any restraint of competition as a crime.

But where competition is not restrained, price cutting puts intense pressure on production costs, leading to deterioration in employment, pay rates and working conditions, and often in product quality too. Moreover, lack of restraint allows the strongest, greediest and most aggressive businesses to swallow up or drive out the others. Ultimately, too much competition leaves us with too few competitors.

The obsession with competition is not confined to prices. It extends to fiscal and regulatory competition between countries. Thus, governments are expected to vie with each other in cutting back taxes and regulations. The grand aim of the free-marketeers is clear: they want minimum tax rates and the laxest possible regulation everywhere. They call this freedom. It is, one may say, a kind of freedom; but it is a kind that destroys quality, equality, stability, solidarity and, of course, standards of public service. One might