BOOKS: 'The End of Loser Liberalism' and the Free Market Myth

• by Charles Davis (washington)
• Thursday, September 29, 2011
• Inter Press Service

To many on the right, this trend is the natural consequence of market forces, freedom and free enterprise rewarding the more productive members of society.

Many on the left also hold free markets responsible for the expanding gap between rich and poor and for the global economic meltdown that accelerated it, arguing for a more interventionist role by the state to promote stability and arrest the growth in inequality.

But as economist Dean Baker observes in his latest book, 'The End of Loser Liberalism: Making Markets Progressive', the truth is that regardless of where they fall along the political spectrum, those who assert that the U.S. economy is based on free markets and is free from state intervention are fundamentally mistaken.

Rather, what we call the 'free market' has in fact been consciously designed by the wealthy and their allies in government to redistribute wealth from the working class to the rich, using methods ranging from patents that allow pharmaceutical giants to reap monopolistic profits to restrictions on labour that neuter Americans' ability to organise and demand better compensation.

If critics of the corporatist status quo want to stop losing policy debates, argues Baker, it is time they started accurately describing the system they are up against and quit debating on its apologists' terms.

'In reality', writes Baker, co-director of the progressive Centre for Economic and Policy Research in Washington, DC, 'the vast majority of the right does not give a damn about free markets; it just wants to redistribute income upward.'

The masquerade of American ideals

By cloaking their language in the rhetoric of liberty, conservative politicians — both Democrat and Republican, from Bill Clinton to George W. Bush — have in fact crafted a coercive economic system dependent on state-granted corporate privilege.

Of course, they can't just say that, so they couch their rhetoric in terms of the American dream, of hard work and ingenuity rightly rewarded with prosperity. But politicians in Washington professing their allegiance to free markets should be believed no more than when they profess their devotion to peace.

Blaming free markets for inequality and economic catastrophe in America is not just factually flawed, writes Baker, but it also 'makes for horrible politics'. It serves as a simple justification, for instance, to politicians whose allegiance is not to principles of free enterprise, but to the principle of the rich.

Accepting the right's framing of the debate allows conservatives to cast themselves as defenders of 'productive' Americans who live in bigger houses than others because they worked harder, enabling the left to be 'portrayed as wanting to tax the winners in society in order to reward the losers'.

Instead of devoting so much time to taxing the rich, the left would be better off striking at the root of the problem and attacking the state privileges that enriched them in the first place, Baker maintains. Instead of allowing the right to masquerade as defenders of limited government, the left ought to reveal conservatives as the true proponents of massive state intervention in the economy.

If Baker's assessment of the U.S. economy sounds radical to the liberal ear, his statement that 'progressives should want a free market' probably seems heretical. But in most cases, he maintains, government intervention not only fails to check the concentration of wealth and the rise of monopolies, but also is in fact the underlying cause for the widening gap between rich and poor.

Unclear alternatives

Contrary to conventional wisdom, Baker repeatedly shows that a true free market would actually lead to more progressive outcomes. Moreover, corporate America fears nothing more than unbridled competition and is more dependent on the U.S. government than on any other institution.

Many liberals and progressives have been conditioned to view the state as the public's last best defence against corporate power; Baker shows that it is more often than not its chief enabler. But while his assessment is radical, his solutions are reformist — perhaps overly so. If Baker is to be faulted, it is for thinking too much like an economist than a progressive visionary.

While Baker demonstrates the many ways state interventions in the economy are designed to enrich the wealthy, he never fully articulates his vision of a more progressive economy, so when he advocates a major government stimulus to reboot the American economy, the reader is left to wonder: absent radical reform, what is really the point?

Direct payments from the state could be more 'loser liberalism' and syndicalism too radical for the time being, but if stimulus money is only going to help reboot the same crony capitalist economy as before, with its fixed wages and debt-based consumerism, will short-term reductions in unemployment come at the expense of more fundamental — and necessary — reform?

If the American left is to capture the public's imagination, it will ultimately need to put forward a broader, more holistic and more compelling vision of society than the one offered by its opponents on the right, one based more on consensus and cooperation than corporations and coercion. That vision is alluded to but not detailed in 'The End of Loser Liberalism'.

But that's a minor quibble. Before it can achieve radical social change, the left needs to radically change its rhetoric and quit debating on the right's terms. And if leftists want to quit losing to conservatives, they would do well to start listening to Dean Baker.

'The End of Loser Liberalism: Making Markets Progressive' is available as a free download on the website of the Centre for Economic and Policy Research.

© Inter Press Service (2011) — All Rights ReservedOriginal source: Inter Press Service

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