Thomas Magstadt
NationofChange / Op-Ed
Published: Monday 25 June 2012
“The Big Lie that is destroying the American economy, the middle class, and the good character of a once-great country.”

The Myth of the Free Market

Article image

As numbing news of multibillion dollar boondoggles, scandals and swindles becomes a daily occurrence, now is the time to take a close look at the right-wing propaganda machine’s favorite canards about capitalism and the free market. In the wake of the worst banking crisis since the Great Depression and in the throes of a prolonged recession brought on by rogue financial institutions operating outside a regulatory system supposedly designed to prevent the very kind of reckless behavior and profiteering that led to the current doldrums, here is a short list of myths perpetrated by the corporate greed-is-good culture – myths that taken together add up to The Big Lie that is destroying the American economy, the middle class, and the good character of a once-great country.

Let’s begin with an axiom the US Chamber of Commerce, Koch Industries, Inc., Goldman Sachs, JPMorgan Chase and Company, and Bain Capital, to name but a few, would all wholeheartedly endorse:  state interference (“regulation”) is inimical to economic growth, job creation, and prosperity.  And this corollary:  a free Market is the best and only way to achieve the greatest good for the greatest number.

Myth #1: There is no such thing as a free market, never has been, never will be. All markets are regulated, but some markets are regulated in the interest of the many and others in the interest of the few. The American economy is now clearly and indisputably regulated by the few and for the few who now control the wealth of the nation.

Proof: The top 20% own all but about 15% of the privately held money and assets in this country. The top 10% of taxpayers owns roughly 72% of the wealth and over 90% of the stocks, bonds, and mutual funds. Between 1981 and 2005, federal taxes on business declined 43 percent. Corporate income taxes accounted for about one-quarter of federal revenues in 1950; today, corporations contribute a mere 6% to the Treasury.

Myth #2: Market economies are hardly a guarantee of peace. The United States boasts by far the world's largest military establishment. Much of the money spent in the name of national security and war waging goes to private corporations through hundreds of thousands of procurement contracts (around 400,000). For FY2002 through FY2008, nearly half of all federal expenditures went to eight federal departments and agencies involved in national and homeland security – including the servicing of war-incurred debt.

Proof: The US is still enmeshed in two protracted wars we initiated (Afghanistan and Iraq). Not counting the intelligence services and "black budget", the US accounts for 43-45% of total world military expenditures every year. According to the prestigious Stockholm International Peace Research Institute (SIPRI), the United States accounted for $19.6 billion of the $20.6 billion global increase in military spending in 2010 – fully 96% of the total. The "military-industrial complex" has corporate and defense tentacles reaching into virtually every political constituency. DOD alone maintains nearly 5,500 bases and military sites in the U.S. and around the world

Myth #3: Market economies are based on competition and therefore guarantee efficiency and prosperity.

Proof: At least 95 percent of the national debt is war-related. The Defense Department absorbs 25-30 percent of the federal budget, depending what is counted and who's doing the counting. Two-thirds (68 percent) of all federal government civil and military employees are involved in national security and war related activities. If you add the $100 billion or more for the two wars we are still fighting, the $80 billion for the intelligence budget, and various other defense-related expenditures, that figure is actually much higher – roughly one-half the entire federal budget for the period 2002-2008.

Myth #4: The Constitution prescribes that corporations are no different from natural persons, with the same right to freedom of speech and expression as you and me, which means, among other things, that Chevron and WalMart can spend as much money as they please to manipulate public opinion and influence the outcome of elections.

Proof: The Constitution says nothing about corporations, much less does it declare ad absurdumthat corporations are people. Not until 1886 in the case of Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394, did the Supreme Court make this astonishing discovery. Never mind that it's preposterous to equate natural persons and corporations: the die was cast.   The 1886 precedent-setting decision –  not the Constitution  –  is the sledgehammer the Supreme Court has used to smash all federal legislation aimed at limiting corporate campaign spending to bits.  The most recent example Citizens United decision, is also the most lethal for democracy because it puts Congress and the presidency on the auction block. 

In reality, no democracy is immune from manipulation by the few.  Or, for that matter, subversion.  During the Cold War the fear of subversion focused on Communism and the danger from below; today, there is no parallel fear of subversion, but ironically the real danger is from above now and it is greater by far than it was then.

The extreme costs of political campaigns combined with the extreme inequality in wealth means that a very few individuals who control vast amounts of money can make or break virtually any candidate for high office, including incumbents. If you don't believe me, ask former Senator Russ Feingold of Wisconsin – a latter-day Solon who tried to reform our disastrous campaign finance laws and was defeated in 2010 by Ron Johnson, a business executive and prominent member of America's entrenched plutocracy, who poured eight million dollars of his own money into winning a Senate seat.

Conclusion: A vibrant market economy will not be long-lived or “sustainable” in the absence of smart regulation designed to accomplish two primary aims – wealth creation and social justice. In the pursuit of wealth and justice, it is the role of the state to balance these two aims.

Regulation is not the enemy of incentive, invention, or innovation. Nor is it incompatible with progress, profits, or personal gain.  In a properly ordered republic, business makes the money and the government makes the rules. If the federal government persists in allowing oil companies, investment banks, and front groups for billionaires to make the rules free of public scrutiny and transparency, the very competition so vital to a market economy will be ever more constricted and joblessness will become chronic rather than "cyclical", as companies cut jobs here at home, replace workers with robots, and go abroad in search of cheap labor, lax labor laws, and tariff-free access to fast-growing markets in Asia and elsewhere.

Meanwhile, a dysfunctional Washington dithers, the rich get richer, the middle class gets poorer, the poor lose hope, elections are a sham, and the American Dream dies a slow but certain death.



Get Email Alerts from NationofChange
Author pic
ABOUT Thomas Magstadt

Tom Magstadt earned his Ph.D. at The Johns Hopkins University School of International Studies. He is the author of "An Empire If You Can Keep It: Power and Principle in American Foreign Policy," "Understanding Politics: Ideas, Institutions and Issues," and "Nations and Governments: Comparative Politics in Regional Perspective." He was a regular contributor to the Prague Post in 1998-99 and has published widely in newspapers, magazines and journals in the United States. He was a Fulbright Scholar in the Czech Republic in the mid-1990s and a visiting professor at the Air War College in 1990-92. He has taught at several universities, chaired two political science departments, and also did a stint as an intelligence analyst at the CIA. He is a member of the board of the International Relations Council of Kansas City. Now working mainly as a free-lance writer, he lives in Westwood Hills, Kansas.

Top Stories

29 comments on "The Myth of the Free Market"

Jose_X

June 26, 2012 6:05am

Livemike, what makes you think it's entrepreneurs responsible for improved standard of living (you referred to productivity so maybe you aren't making the claim of std of liv) while the government regulation that grew alongside and public sponsored R&D is not? Since when does removing rules and referees lead to better or safer sport for the participants? You can attack the military complex, but without it you have dueling private armies and the injustice, inefficiencies, and extra bloodshed that come with that. We are no longer a nation with tons of land just over the horizon so that anyone with disagreement or who wants a fair shot can keep moving on. Every nation has immigrants. This nation, among other things like decent economic promise (helped by our natural resources) has had stability and religious freedom, two items that attract immigrants (but again immigration is natural). Why should I accept your claim on property? I didn't sell you my rights to it. I don't even think you have greater rights to land than anyone else and certainly not native Americans. Point is that without a regulation and laws, we'd have a lot more disputes and a lot less respect for the property of others. Why do you ignore that the Fed has reigned over great stability and the breaking down of successful rules instilled from the lessons of the Depression has again resulted in leverage commitments on paper that cannot be met, and surprises left and right, especially with so much secrecy? Attacking controlled inflation? Really? I have lots of criticisms on our current system. That military and court system does support the business/trader class over the worker class (more so today than in past decades), but part of the problem is the set of broken laws favoring the wealth begets wealth advantage in markets that leads to increasing degrees of lopsided wealth (legal rights) distribution absent regulation and rules on that. As for paying fair share, no way the wealthy elite are paying for the power and privilege our laws and military provides them. Many games have reset conditions in order to maintain competitiveness and fairness. It's why seasons start afresh, races starts back at the line, board games are started from the initial position with fair distribution, etc. Where is the reset button in our economy? How many people start many places back and dollars short and never really had a fair chance (although some overcome odds or excel particularly at trading or similar skill)?

Livemike

June 29, 2012 7:47am

Without the investments made by entrepeneurs the standard of living we have today would be physically impossible. The factories that make almost everything you use were not made by factory fairies. The is ZERO evidence that public investment in R&D lifts economic growth, in fact it's negatively correlated with it, and in any case was NEVER enough to even theorectically have created the boom in living standards since 1850.

No without the military industrial complex there would not be duelling private armies. Look up what Military Industrial Complex means.

You should accept my claims to property because they are legitimate and not based on violation of another's rights. The choice is between a system of property rights based on liberty and one based on theft. Without some laws, sure there would be more disputes, but the legal system is well beyong that. The laws CREATE disputes because they go beyond protecting property and into infringing on it. You yourself admit that the system favors the business/trader class, but you want to give it more power. What is wrong with you? Trying to blame this on "absence of regulation" when there are thousands of regulations is truly delusional.

The reason that ignore that the Fed has reigned over great stability is because it's a myth. For god's sake we're in the middle of a Fed-caused disaster, please stop telling me how well the Fed did. The lesson of the Depression is "Don't trust the Federal Reserve System".

You are right about one thing, the elite aren't paying their "fair share" to get the power they have. But that's because the system YOU SUPPORT gives them too much power, not because they pay little. They pay far more than a just system would cost to run, that sounds like more than their fair share of payment for a just system. The problem is people like you instituted an unjust one.

Your idea of "resetting" the economy is moronic. Why would anyone try to get rich if that happened?

AnnieMO

June 25, 2012 9:14pm

Even though the Federal Reserve was involved in the cause of the Great Depression, you cannot discount the 'Robber Barons' who acted strictly for greed and profit, buying up everything they could get their hands on, paying poor wages, and using the banks-all done without regulation. It was because of all of the above and more, regulations under mainly FDR were passed by Congress along with others that came later, like the Glass Stegle Act. While those were enforced, we had no such drastic financial problems, even when the market went down.
When the Savings and Loan Industry managed to convince enough in Congress to deregulate them it was only a short while later the nation was faced with what became known as 'Silverado" in the 1970's , the tax payer had to bail out the Savings and Loan Industry (which was then separate from regular banks)....According to a lawyer friend of mine who was still working on that for the US govenment only 3 years ago, we are STILL paying it off!

Then, under Reagan, the repeal of regulations in commerce and banking began and continued on, president to president even to Clinton. Those deregulated areas over banking gave us the grand actions of the hedge fund operators which caused the biggest economic collapse in world history. And those regulations recently passed were no where near firm enough to keep it from happening again. Indeed, they have been hedging bets on the repayment of debts by Greece and other indebted nations to the point that it has driven up the interest rates on the very loans those countries need! Thus making it even more difficult for those countries to pay them and get their economic house in order. If the stock market here goes down because of the indebtedness of Greece, Spain,etc. you can place a big part of the blame to the same hedge fund practices that caused the housing collapse here. And the same uncontrolled greed.
It is unbelievable that this country is so in the pocket of the banking industry and its wealthy owners that this should be possible. In fact it is shameful . It is also shameful that the media-who has the 'freedom of the press' which is a mandate to search for and report the truth to the citizens of this country-and they are doing a lousy job of doing so.

monk

June 25, 2012 7:11pm

There is such a thing as a free market, but it is too small to consider.

Riconui

June 25, 2012 2:58pm

Here's the line that lept out at me:

..........."a regulatory system supposedly designed to prevent the very kind of reckless behavior and profiteering"..........

I know. He said that corporations were operating "outside" this system. How did they get there? And if the system was designed to "regulate", why is it not doing so?

I have zero faith that the system was designed to regulate the kind of avaricious self dealing that is the mark of Wall St. these days. In fact, I would make the case that it is "designed" to NOT regulate while providing the impression that it is in fact doing something. The SEC, and it's sister regulatory agencies are essentially fig leafs for hedge fund operators and investment banks. To have the cop on the beat and then pay him to NOT enforce the law I believe is the quintessential case of corruption. To game the regulatory system, by revolving door policies or outright bribes,......oh! Sorry! I meant to say campaign contributions, so as to make the most despicable cons "perfectly legal", does not make them moral or ethical. Ethical benchmarks are not a subject for Congress to debate because they have no moral authority on the issue.

The myth that seems to get missed is largely unspoken; Free market capitalism as we've come to regard it, also presumes unlimited growth. (If YOU are going to get to join the millionaire or billionaire club, where is the wealth going to come from after all?). Growth, growth, growth is the philosophy of cancer. And not unlike it's metaphorical cousin, economic growth left UNregulated, will in time, kill it's host.

Capitalism may have some virtues, (though it would be hard to judge by taking the U.S. in 2012 as an example), but checking it's own excesses is not one of them. In order to achieve a functioning economic yin, requires a regulatory yang. Such a stasis of economy would require that the bureaucratic functionaries be selected out of college and not having been water boys for the industries they are asked to regulate, and further that they cannot be hired away by the industries they regulate.

If anyone has any plan to recover the economy for the good of the PEOPLE, we will first have to retake our Congress. But before you do that, turn off the TV. It only makes you dumber, (and that's the ones that AREN'T fox news. If you watch fox news for anything other than the train wreck aspect, I have little hope for you. The damage may have gone too deep).

AnnieMO

June 25, 2012 9:17pm

..."a regulatory system supposedly designed to prevent the very kind of reckless behavior and profiteering".......ceased to exist once those regulations were repealed. Look up the history of deregulation on commerce and banking.

Livemike

June 25, 2012 11:37pm

@AnnieMO "ceased to exist once those regulations were repealed. " err... sorry no. Very few regulations were repealed and some of those were actively harmful (e.g. the seperation of commercial and investment banking in Glass-Steagall). The number of regulations on the economy increased throughout the Bush II era as did the number of regulators. People who claim the banking industry has been deregulated should actually read the regulations sometime. It won't help them understand anything but it will shut them up for about a month.

Livemike

June 25, 2012 2:38pm

Oh and BTW, "Let’s begin with an axiom the ... Goldman Sachs, JPMorgan Chase and Company, ... would all wholeheartedly endorse: state interference (“regulation”) is inimical to economic growth, job creation, and prosperity. "

Really? Goldman Sachs, the biggest beneficiary of state intervention in the economy and regulation would wholeheartedly endorse the idea that it's bad? Correct me if I'm wrong but didn't JPMorgan just lose 3 billion dollars trying to support Federal Reserve System policy, the biggest single intervention in the economy?

mycophile

June 25, 2012 1:33pm

Upon my read of the article, I thought it was poorly written, if not poorly thought through.

But upon my read of commenters such as LIVEMIKE and DR WHITE, I was reminded that "conservative" ignorance is far less helpful and far more dangerous than is "liberal" intellectual infirmity.

Livemike

June 25, 2012 2:15pm

I see, and specifically what was I ignorant about? What in fact did I not get exactly and 100% right? Because you don't seem to have a case beyond "No it isn't.".

larronm

June 25, 2012 12:36pm

Seriously? Have you guys no grasp of history? Are you incapable of reasoning? A couple of quick points: The depression of the 1930's was the result of a) the lack of regulation and oversight during the twenties. This was a period of 10% margins, watered stock, shell corporation and rampant speculation. Unseen by those in power was the concurrent spreading dust bowl of the midwest. Foreclosures of small farms, abandonment by tennant farmers and failures of local banks. The eventual collapse of the system was inevitable and those who forsaw it were dismissed as radicals and spoilers. Then, b) once the stock market crashed the conservatives in government had no idea what to do. They stuck to the old concepts of reigning in spending, leaving the economy to mend itself and contracted all aspects of government to reduce the debt load. The more they retracted, the worse things became. John Maynard Keanes was a newcomer to the thinking and his ideas were rejected. As the country sunk deeper into depression, poor Mr Hoover was at a loss to know what should be done so he relied upon the advice of the capitans of industry who's interest was their own survival, not the country's.

So here we are, all these decades later, and we have learned nothing. The facts become disputable. Disproven theories are again valid. History is rewritten to suit the claims of the powerful. The nations wealth is increasingly pushed upward into the hands of fewer and fewer people who have increasing power and influence on public policy. Their motives are clear to those who are willing to see. A country run by the wealthy few, supported by the successful professionals while the majority struggle to survive in jobs that pay subsistance wages to workers who fear to seek better compensation on threat of loss of the job they have. High levels of unemployment keep workers from complaining and the destruction of unions allows employers to determine wages and benefit levels without challange. Add in the vast sums of campaign cash to convince voters that up is down, black is white, bad is good and you have the perfect setting for oligarcy. Welcome to the future. Or perhaps back to the future.

AnnieMO

June 25, 2012 9:28pm

LARRON
You are very accurate in your history! And the tax history during that period is also interesting. Census

1923 - 3% 56% Census

1924 - 1.5% 46% Census

1929-1931 1.5% 24% Census

After the crash it was raised back

1932-1922 4% 63% Census

We have those whose income bracket is the highest paying less, the majority paying only 18% and other paying Zero-because of off shore bank accounts, other loopholes and write-offs. Is it any wonder, with two unfunded wars, historically low tax cuts for the top bracket plus unregulated greed we have come to this?

Livemike

June 25, 2012 2:10pm

It is you who refuse to learn from history. The Great Depression was caused by the Federal Reserve System inflating the money supply and causing a speculative boom. not a lack of regulation. This is admitted by the Fed itself. The farming crisis was a direct result of Hoover, as Secretary of Commerce, artifically pushing up crop prices leading to overfarming and a massive surplus of crops.

Once the stock market crashed the "conservatives in government" weren't listened to, Hoover, as President, never reigned in spending, never left the economy to mend itself and was in fact one of the most economically proactive Presidents ever. He certainly did not rely on the advice of the "captains of industry" and in fact spent a lot of time giving them advice. How well the interventionist/high spending policy worked can be judged by the fact that you yanks immediately elected someone (FDR) who promised to cut spending and balance the budget. He lied. As a result of not one but two Presidents totally rejecting free market theory the Great Depression lasted until 1945. Private investment didn't recover until at least then (note private investment didn't recover even during a major war when the military was spending large percentages of GDP.

So here we are decades later and guys like you are still saying black is white, up is down etc. You still decry a country run by the wealthy few, high levels of unemployment, etc. ignoring the fact that your policies led to it, and will continue to increase it. People like you never bother to figure out if their policies help or hurt the poor, because you know you'll get approval for your supposed intention to help them. So all you have to do is listen to officially approved leftist history, never challenging even the most blatant errors in it and repeat the old rot.

BadArticleIsBad

June 25, 2012 11:36am

livemike is spot on. this article is terrible.

the author tries to dispel myths about free markets by using the US as an example... too bad the US is not a free market, for reasons stated in the article.

does the author even know what a free market is?

drwhite

June 25, 2012 11:32am

Agree greatly with LiveMike, and here is why:
Building the New Economy:
Ten Steps We can Take NOW:

James Gustave Speth Yes Magazine Op-Ed
Published: Tuesday 19 June 2012
Are we ready for a new economy?
And a new politics?
First, some definitions. I think we can define the new economy as one where the overriding purpose of economic life is to sustain and to strengthen People, Place, and Planet, and is no longer to grow Profit, Product (as in gross domestic), and Power.
And a new politics? No surprises here. A new politics in America is one that replaces today’s creeping corporatocracy and plutocracy with true popular sovereignty.
Well, then, let’s explore how we can begin the process of transformation to a new economy and a new politics. This afternoon, I want to offer 10 steps we can take now that would start us on our journey. Time is short, so here they are.
Step 1
The journey to a new political economy begins when enough Americans have come to two important conclusions. The first is that something is profoundly wrong with our current political economy—the operating system on which our country now runs. That system is now routinely generating terrible results—failing us socially, economically, environmentally, and politically. When big problems emerge across the entire spectrum of national life, as they surely have in our country, it cannot be for small reasons. We have encompassing problems because of fundamental flaws in our economic and political system. The second conclusion follows from the first. It is the imperative of system change, of building a new political economy that routinely delivers good results for people, place and planet.
A growing number of Americans are already finding it impossible to accept the deteriorating conditions of life and living. They see frightening gap between the world that is and the one that could be. So, our first step is to become teachers—to help bring these Americans, and many more, to see the basic relationships: that the huge challenges we face are the result of system failure, that our current system of political economy no longer deserves legitimacy because it doesn’t deliver on the values it proclaims, and that, therefore, the path forward is to change the system. As the slogan goes, “System change, not climate change.” This is the core, foundational message, and we must pursue many ways to reach ever-larger numbers of Americans with it.
Step 2
What I call progressive fusion. If the various U. S. progressive communities remain as fragmented and as in-their-silos as today, we won’t be able to take advantage of positive opportunities opened up by rising popular disenchantment and by the inevitable crises ahead. What’s needed, for starters, is a unified progressive identity, a concerted effort to institutionalize coordination, a common infrastructure capable of formulating clear policy objectives and strategic messages, and a commitment to creating a powerful, unified movement beyond isolated campaigns.

My comments on above:
Yeah, CCCP style.

Critical here is a common progressive platform. It should embrace a profound commitment to social justice, job creation, and environmental protection; a sustained challenge to consumerism and commercialism and the lifestyles they offer; a healthy skepticism of growth mania and a democratic redefinition of what society should be striving to grow; a challenge to corporate dominance and a redefinition of the corporation, its goals and its management and ownership;

My comment on above:
As in no private ownership, no consumerism because consumer offerings will be reduced to just basic needs, one kind of car, one kind of shoes, one kind of clothes. Everybody dresses like the chairman.......

a commitment to an array of prodemocracy reforms in campaign finance, elections, the regulation of lobbying; and much more. A common agenda would also include an ambitious set of new national indicators beyond GDP to inform us of the true quality of life in America.
Coming together is imperative because all progressive causes face the same reality. We live and work in a system of political economy that cares profoundly about profit and growth and about international power and prestige. It cares about society and the natural world in which it operates primarily to the extent the law requires. So the progressive mandate is to inject values of justice, democracy, sustainability, and peace into this system. And our best hope for doing this is a fusion of those concerned about environment, social justice, true democracy, and peace into one powerful progressive force. We have to recognize that we are all communities of a shared fate. We will rise or fall together, so we’d better get together.

My comments on above:
Together in a lovely litte commune down by the river complete with barbed wire fences, our commune garden for food growth, and our daily rations of water..... sounds like fun for all!!!!

Step 3
Help us speak truth to power. Donate what you can afford to support NationofChange.
A powerful part of the drive for transformation must be a compelling envisioning of the world we would like to leave for our children and grandchildren—a new American Dream, if you will. When systemic change does come, it does so because the people agitating for change have painted a compelling vision of a better future. And this new dream should be accompanied by a new narrative or story that explains America’s path from yesterday to tomorrow. Harvard’s Howard Gardner stresses that “leaders . . . can change the course of history . . . by creating a compelling story, embodying that story in one’s own life, and presenting the story in many different formats so that it can eventually topple the counterstories in one’s culture. . . . The story must be simple, easy to identify with, emotionally resonant, and evocative of positive experiences.”
Bill Moyers has written that “America needs a different story. . . . So let me say what I think up front: The leaders and thinkers and activists who honestly tell that story and speak passionately of the moral and religious values it puts in play will be the first political generation since the New Deal to win power back for the people.”
We can realize a new American Dream, America the Possible, if enough of us join together in the fight for it. This new dream envisions an America where the pursuit of happiness is sought not in more getting and spending but in the growth of human solidarity, real democracy, and devotion to the public good;

My comments on above:
Yes, where you will happily work for the state, getting your bountiful allocations of food and clothes (or gruel and grays). Everybody makes the same salary, eats the same food, has the same allocated number of children, drives the peoples car for the assigned number of miles per month. We all gonna be so happy!!!!

where the average American is empowered to achieve his or her human potential; where the benefits of economic activity are widely and equitably shared; where the environment is sustained for current and future generations; and where the virtues of simple living, community self-reliance, good fellowship, and respect for nature predominate.
Step 4
One key task for progressives of all stripes is not merely to have a compelling vision but also to pioneer the development of a powerful set of new ideas and policy proposals which confirm that the path to this better world does indeed exist. We must show that when it comes to defining the way forward, we know what we’re talking about.

My comments on above:
Yeah, we’ve read Lenin and Marx, them boys were sharp. Look how it all turned out for their ideas.

We are dreamers, perhaps, but dreamers with tools. The good news here is that system-changing proposals already exist in many of the key areas of transformation—ideas for dethroning GDP, transcending consumerism, transforming corporations, revitalizing communities, building a different system for money and finance, and more. The goal here is to design and test a new operating system. Carrying forward this work is something to which I know many of the groups represented here today will contribute.

Step 5
It’s vital that we continuously strengthen the intellectual capital of the new economy movement, as well as regularly link ideas to action and prepare for the crises that will surely come. This means that we need to dramatically strengthen the institutional capacity to do these things. That is why we have created the New Economics Institute, for example. And here, let’s face it, the desperate need for most institutions working these issues is funding. Given the stakes involved, financial support for new economy work from foundations and individuals has thus far been much too limited. Together, we can help to change this situation.

My comments on above:
Yep, it will all be nationalized. No more taxes, we all work for Uncle Sam!

Step 6
This is the step I suspect many of you have been waiting to have recognized. It is certainly the step that many of you are already taking!
I have to reference, of course, to the extraordinary work being done today in America’s communities and regions to bring the future into the present, without waiting on the rest of the world to catch on and catch up. Many of you are already building a new world from the ground up with a proliferation of real-world, predominantly local initiatives—new forms of community revitalization and innovative community action—new business models focused on local living economies, rootedness, and sustaining people and nature (e.g. B-Corps, public-private and profit-nonprofit hybrids, mission-protected corporations) as well as new growth of older models (e.g. worker owned coops and other forms of employee ownership)—and new lifestyles and workstyles adopted at the individual, family and organizational levels. These initiatives are not only worthy in themselves, they provide inspirational models that can be replicated as the movement grows. They provide opportunities for people to get involved. And they also change peoples’ minds. As they say, seeing is believing. This may be the most hopeful thing going on in America today. So more power to you.

My comments on above:
Communism in very sweet words. “Employee ownership”, a term for commune ownership.

Step 7
This step embraces another area where numerous of you are already active. Many of the ideas needed to transition to a new political economy must await better times, or they need further development. But many do not, and should be pursued now, even in today’s political process. Of particular importance here are what we can call non-reformist reforms—they may look like mere reformist incrementalism, but they plant the seeds of deeper changes. The New Economy Working Group, the Institute for Policy Studies, Yes! Magazine and the New Economy Network, for example, have collaborated on pathbreaking work on reforms in banking and finance and on jobs in the new economy. Demos is pushing new indicators of progress beyond GDP. The Democracy Collaborative is developing and promoting new models of community revitalization and business ownership. And on and on. Again, more power to you. We need to define a new economy policy agenda that has a fighting chance today, and we need to pursue it with all our strength.
Step 8
This Takes us into politics. Clearly, America faces a daunting agenda, one that requires far-sighted, strong, and effective government leadership and action. Inevitably, then, the drive to respond to these challenges leads to the political arena, where a vital, muscular democracy steered by an informed and engaged citizenry is needed. That’s the democracy we need, but, unfortunately, it is not the democracy we have. Right now, Washington isn’t even seriously trying to address most of the country’s challenges. It is unimaginable that American politics as we know it will deliver the responses needed.

My comments on above:
Yeah, we need more permanent leaders, none of this election crap every four years. People who are leaders for the long term, who know what we need, know what we require, and give just that and no more. Long live the Chairman!!!!

The deep transformations we need—and even most of the proposals for reform offered by progressives in Washington today—will not be possible without a new politics in America. As Michael Waldman, director of one of the key reform groups, the Brennan Center for Justice, has said, “Progressives have to grapple with this central truth—we can’t solve the country’s problems if we don’t fix the systems of democracy.” The antidote to creeping corporatocracy and plutocracy in America is a strong, muscular democracy in America.
We know what must be done here—and done with urgency before we decline into terminal corporatocracy and plutocracy. We need to guarantee the right to vote and ensure that all votes are counted equally, effectively challenge the two-party duopoly with fusion voting and otherwise, overturn Citizens United and enact meaningful public and citizen financing of elections, regulate lobbying and the revolving door, reform Senate rules on holds and filibusters, for starters.

My comments on above:
All votes are equal. All votes are for the Chairman!!! No more parties, no more lobbying for our needs, no more revolving door elections. No more filibusters and discussion, the Chairman will direct us in the way in which we shall go!!!!

Step 9
How do progressives begin to drive real change? The short answer is that we need to build a powerful citizens movement. In today’s America, progressive ideas are unlikely to be turned into action unless they are pushed relentlessly by citizen demand. The more serious the change sought, the louder the demand must be.

My comments on above:
A little revolution never hurt anybody, really. Power to the people (for about an hour or so).

Achieving meaningful changes will require reaching out to diverse communities, and it will require a rebirth of marches, protests, demonstrations, direct action, and nonviolent civil disobedience. No one who followed recent events in Egypt or at the Wisconsin State House, or who remembers the civil rights and antiwar protests of the 1960s and 1970s, or has seen the impact of Occupy and other protests, can doubt their importance. Author and social critic Chris Hedges reminds us that “Civil disobedience, which will entail hardship and suffering, which will be long and difficult, which at its core means self-sacrifice, is the only mechanism left.” Those words ring true to those who have worked for decades to elicit a meaningful response to the existential threat of climate change and who find, after all the effort, only ashes.This reality has been stressed by many of our most perceptive observers. Washington Post columnist Harold Meyerson wrote in 2010, “If there’s a common feature to the political landscapes in which Carter, Clinton and now Obama were compelled to work, it’s the absence of a vibrant left movement. . . . In America, major liberal reforms require not just liberal governments, but autonomous, vibrant mass movements, usually led by activists who stand at or beyond liberalism’s left fringe.” Successful movements for serious change are launched in protest against key features of the established order. They are nurtured on outrage at the severe injustice being perpetrated, the core values being threatened, and the future prospects that are unfolding. And they insist that power concede to their demands. As Frederick Douglass famously said, “Power concedes nothing without a demand. It never did and it never will.” If progressives hope to succeed, then the movement must capture the spirit of Frederick Douglass.
Step 10
The final step we need to pursue is a little different. An imperative we face is to preserve the possibility of a bright future by preventing any of today’s looming disasters from spinning out of control or otherwise becoming calamitous or so overwhelming that they monopolize resources of time, energy, and money.
So, while the struggle to build a new system goes forward, we must do everything we can to make the old system perform to head off such calamity. For example, climate disruption is already well under way. Should we fail to act decisively on the climate front, the world will likely become so nasty and brutish that the possibility of rebirth, of achieving something new and beautiful, will simply vanish, and we will be left with nothing but the burden of climate chaos and societies’ endless responses to it.
Demands for immediate amelioration—for jobs, for tax justice, for climate action—will at best be met with proposals for modest accommodations and half measures, and the struggle for deep, systemic change will be met with fierce opposition and determined resistance. So all-important conclusions emerge—namely, that the prospects for systemic change will depend mightily on the health of our democracy and the power of the popular movement that is built. And those prospects will also depend mightily on our willingness to take real risks, to struggle together, to sacrifice, to put it all on the line.To sum up, I believe we can already see how the dynamics of fundamental change might emerge—how systemic change can come to America. As conditions in our country continue to decline across a wide front, or at best fester as they are, ever-larger numbers of Americans lose faith in the current system and its ability to deliver on the values it proclaims. The system steadily loses support, leading to a crisis of legitimacy. Meanwhile, traditional crises, both in the economy and in the environment, grow more numerous and fearsome. In response, progressives of all stripes coalesce, find their voice and their strength, and pioneer the development of a powerful set of new ideas and policy proposals confirming that the path to a better world does indeed exist. Demonstrations and protests multiply, and popular movements for prodemocracy reform and transformative change gain strength. At the local level, people and groups plant the seeds of change through a host of innovative initiatives that provide inspirational models of how things might work in a new political economy devoted to sustaining human and natural communities. Sensing the direction in which things are moving, our wiser and more responsible leaders, political and otherwise, rise to the occasion, support the growing movement for change, and frame a compelling story or narrative that makes sense of it all and provides a positive vision of a better America. The movement broadens to become a major national force.
In the end, it all comes down to the American people and the strong possibility that we still have it in us to use our freedom and our democracy in powerful ways to create something fine, a reborn America, for our children and grandchildren.

My comments on above:
Long live the Socialist Democratic Republic of Amerika!!!!!! Who needs freedom anyway.

oldhat

June 25, 2012 11:32am

albert m # 1 immigrants came with nothing and moved up m2 most of countries you name were not free market m3 colonies were crown owned m4 so you hate unions? livemike wins debate

note robin hood stole from goverment

Albert Kapustar

June 25, 2012 11:11am

Livemike you have no idea what you are talking about and if you ever read a history book instead of listening to Rush propaganda you would know that.
Myth 1 a freer market doesn't help the poor and working class or promote a free country.It does the opposite.If we look at the 1850's to 1929 most immigrant factory workers lived crowded with other families in slum tenements where whole families including children had to work just to eck out a mininimal survival.Farmers were turning to cooperatives and a progressive party in the 1880s because the big railroads were charging so much they were bankrupcting the farmers.This time period in history was considered the freeist capital has ever been.And it was the same in england and every other country that had free capital.
myth 2 free capital leads to wars,many wars.Because we have to protect our corporations we in the US,england,germany,Japan had to have hugh armies and colonies to provide the resources your free capital with the raw materials it needed.In fact it was the businessmen like today who were pushing for the wars.
myth 3 the debt was caused by free trades desires for colonies,the military they want and the fact your business friends don't want to pay their fair share of taxes for problems they caused lead to our hugh debt
Myth 4Why can't we say the same things as part of a group like an individual.Because one group has almost 75% of the money iin the US and democracy is supposed to be based on the will of the people,not how much propaganda you can create like in a Communist or Fascist country like conservatives are trying to create in the US.Propaganda can and does sway weak minds like on the conservative and libertarian side.What you want are more equal rights for the priviledged and yes you are a liar.Citizens United did change how much you can spend on a campaign as we are all seeing,those of us with open eyes that is.
You are either a rich person who doesn't like the peasants or a person who is brain damaged from all the propaganda you approve of bought by the wealth of the rich

Livemike

June 25, 2012 2:33pm

@Albert Kapustar
M1: Ok, first off I rarely listen to Rush, they're an OK band but really more of a Queen/Mental as Anything fan. If we look at the 1850s to the 1920s we find that people were immigrating to America, why do you think that is? Because their lives were better in the USA, and those lives continually improved because the economy was freer. Using the past as proof that a free economy isn't as good for the poor ignores the fact that a free economy makes things better THROUGH TIME. Of course in the past it wasn't as good to be poor, that's because they hadn't had as much economic growth as we have had.

BTW those big railroad companies that were charging too much, would those be the massively subsidised and regulated non-free market companies that used government to keep competitors out? Because if they were (and yes they were) that's not a point in your favor.

M2: No we do not need huge armies and colonies to provide the resources. Does China need to invade my country, Australia to get enormous amounts of resources? No, there's a new method of acquiring resoures, I will let Homer Simpson's brain explain: "Money can be exchanged for goods and services.". This is the free market way to gain resources, warfare is the non-free market way. That "businessmen" push for something doesn't mean it is a part of the free market. In fact businessmen often push for government intervention to favor themselves. If you are genuinely ignorant of this fact then you really know nothing about economic history or politics and should refrain from talking about them.

M3: No the free traders did not have a desire for colonies, that was the mercantilists, pretty much the opposite of the free traders. To invade a country for it's resources is not a free trade. Seriously how is it that you don't know this? As for the "not paying their fair share" thing, I call bullshit. Even if the lower 90% paid _all the taxes_ they could still support a free market government cheaper than they support the current one. Oh and BTW the rich pay about the same proportion of taxes as the poor, so they are paying their "fair share" by some definitions.

BadArticleIsBad

June 25, 2012 11:34am

you sir are fail.

http://mises.org/daily/3788

monk

June 25, 2012 7:14pm

No, the article is generally accurate. The one you shared, though, is not because it refers to a period when interest rates were involved. Today, the major problem is over a quadrillion dollars in unregulated derivatives which hardly involve interest rates.

Livemike

June 25, 2012 11:33pm

I'm sorry but I have to inform you, you're an idiot. The idea that interest rates had nothing to do with the speculative housing bubble that caused the crash (and the crash caused the crisis not derivatives) is something only someone either really stupid could believe. So is the idea that the people who allegedly own a quadrillion dollars in "unregulated" derivitaves decided to buy them without looking at interest rates.

Understand I'm not saying this to be offensive, it's just that you should know that to believe what you claim to believe you'd have to be stupid and you should know this.

AnnieMO

June 25, 2012 9:33pm

Monk, you are partially right; but derivatives and hedge funds are now influencing the rise of interest rates on the loans that Greece and other indebted countries either have or are trying to get, making their climb into some kind of solvency even harder...which, unfortunately affects our stock markets here. Therefore, the lives of many middle class retired people.

Livemike

July 22, 2012 7:57pm

@AnnieMO No derivatives aren't influencing the interest rate on Greek loans, only the perception that said loans aren't going to be paid off is. The only way a derivative would change the interest rate someone would want to lend to Greece is if it lowered the maximum exposure to buying a Greek bond (e.g. you get a put option to sell it at 25% of face value at any time.).

How derivatives helped make the Greek debt crisis worse is that the Greek government hide their real position with derivatives.

Brian Glennie

June 25, 2012 8:05am

PEACE on EARTH, Goodwill to Men and Women.... well maybe only on Christmas day, we don't want to ruin our profits this year.
WHERE IS ROBIN HOOD WHEN YOU NEED HIM!

Livemike

June 25, 2012 6:43am

Ok, Myth 1, irrelevant, even if there was no such thing as a totally free market there is such a thing as a freer market and such a freer market provides prosperity and freedom. That the current market isn't free is something libertarians have been saying for decades, and people like you have been ignoring the problems caused by that for as long, problems that disproportionaly hit the poor, racial minorities, disabled, immigrants etc.

Myth 2: So you're arguing that the free market doesn't create peace by pointing to the activities of the US government, which is not a free market institution, and it's cronies, the Military Industrial Complex, which also isn't a free market institution. I mean pointing to massive GOVERNMENT expenditure creating a problem hardly indicts the free market. The facts you list result from the ABSENCE of a free market in military defence, not it's presence.

Myth 3: Again, what does this have to do with the free market? It's not like people are going down the military intervention store and buying a pound of shoving guns into someone's else's business. Again, you're proving the free market/libertarian case against government intervention.

Myth 4: So why exactly aren't we allowed the same rights collectively as we have individually? Why aren't we allowed to say something as part of a group that we can as an individual? And BTW Citizens United didn't create problems with the electoral process, almost all the spending has been stuff that was legal before CU and is still legal. In any case don't you wonder why the ACLU was on the other side in this?

Your conclusion is frankly, assinine. You people have had decades for your smart regulation to work. So far it's cost billions, increased wealth concentration both in terms of who owns it and what insititutions it's put into and generally resulted in everything you say you hate. When are people like you going to give up and realise that it simply doesn't work?

AnnieMO

June 25, 2012 9:42pm

but your people deregulated after those regulations HAD worked from the 40's through the early 70's! Those were the years of the biggest growth of the middle class in history! More and more of those who had come from poor backgrounds were able to pull themselves into the middle class, helped, I might add, by the might of Unions who brought decent wages to all, a 5 day work week, a safe working environment, holidays and vacation days and finally, health insurance coverage. It was also helped by the government sponsored GI Bill that caused a huge increase in college graduates.
Whereas NO regulations on the books brought on the Great Depression and DEregulation of commerce and banking brought on the current mess.
Last night a documentary gave government statistics showing that there are more homeless people and those on the verge of losing everything in the suburbs than in the inner city! More children and families going to food kitchens! That this country of wealth should come to this due to pure stupidity and greed is something we should all be ashamed of. Period.

Livemike

June 25, 2012 11:29pm

Oh god the "regulations caused the massive growth for 30 years" myth. Yeah how much of that growth was things people actually wanted as opposed to things the government made them buy through taxes?

I don't know why you brought unions into it but no they didn't bring decent wages, a 5 day work week etc., entrepeneurs did that by raising the productivity of labor.

Your claim that "no regulations on the books" brought on the Great Depression is a moronic assertion. The Fed caused it and the Fed was created by government, sorry that's the facts. So anyway if deregulation caused the current mess why did it happen in GWB Presidency? Because he increased regulations and the number of regulators about as fast as any President since Carter. I don't know who told you that the economy deregulated during the Bush II era but put simply, they lied to you.

monk

June 25, 2012 7:28pm

Your first point is correct.

Your second point is contradicted by your first, as you refer to government spending that affects something which you imply doesn't exist. As for the connection, it's not difficult to see because you just admitted to an MIC.

Your third point is right.

Your fourth point can be seen in easy credit and tax cuts available to U.S. citizens in return to voting for one Reagan clone after another.

As for your point about the conclusion, the problem was actually an absence of "smart regulation," leading to over a quadrillion dollars in unregulated derivatives. Only a trillion dollars of that led to the 2008 fallout, which today has cost us over thirty trillion dollars.

If any, the current crisis is the result of free market capitalism, which is the result of a free market. That is, one starts with small markets, then some become more wealthy than others, and eventually take over. From manufacturing and mechanized agriculture, they soon take over government, outsource labor, then move to Wall Street to profit from financial speculation. Similarly, citizens move to the service sector and make more money as well, especially for those who have gone to college. Easy credit and tax cuts allow them to buy houses, cars, and other goods that make up a middle class lifestyle, and in return vote for government that provides tax cuts and that support corporations that provide easy credit. After which, the whole thing falls apart because of increasing debt.

So, you see, what you think has not worked hasn't been in place at all. What you think will work has been in place and caused the current crisis.

Livemike

June 25, 2012 11:23pm

No my second point is not contradicted by my first. The US military and the military industrial complex are not free market institutions, that is they are not institutions based on free market exchanges i.e. exchanges that are voluntary. And yes, it's not difficult to see that I admitted the Military Industrial complex existed, in fact I specifically stated that it did and it's a problem for those against the free market.

As for voting for "one Reagan clone after another" would you care to list the Presidents you think were free marketeers or even close to it? You know the ones that didn't grow the deficit, increase the number and impact of regulations on business, etc.? Because I can't think of one offhand. Not Carter (although arguably he was closer than most others, but was stymied by his Congress), not Reagan really, certainly not Bush I or II, Clinton, again no.

You know why there wasn't any "smart regulation" that prevented the crisis? Because smart regulation doesn't happen. If you wanted a smart regulation that would have prevented the crisis it's really easy to make "The Federal Reserve System is now dissolved" there, done. But it's not going to happen.

You claim this is all the result of free market capitalism, if so why did it start in one of the most regulated sections of the economy, the financial sector. There are literally thousands of regulations in the financial sector. To get an idea of how much government interference there is in banking I have an analogy. Imagine that you're driving along and your car breaks down. A government agent is however driving behind you and gives you his government car, in exchange for your broken down car, even though it broken down because you didn't bother to check the oil or do basic maintaince for years. The government then tries to sell your broken car to make up some of the money your new car cost. That's basically what FSDIC does for banks. Not exactly free market is it?

Of course since you obviously don't know that over 35% of the US economy is government (and that's not counting costs of complying with regulations) you obviously know nothing about whether the economy is free market or not. So I'll just ask you one question, who told you that the economy was anywhere near a free market? Because you should stop trusting that person.