I realize Democrats and progressives more generally love to lose. What else can possibly explain their insistence on framing their policies in the worst possible way?
This point is continually pounded home when progressives adopt the framework where the right wants the unfettered market, but progressives want the government to have more control. This is wrong logically and it is horrible messaging politically. Most people like the market and distrust the government. It is absolutely crazy that Democrats and progressives would deliberately put themselves on the wrong side of this balance.
While this framing occurs all the time, the immediate cause of my anger was a piece by E.J. Dionne, a good liberal, on the “abundance agenda.” As Dionne tells it:
“For decades, the broad left across the democracies have labored to find the right recipe for what is often called ‘the mixed economy.’ It’s the entirely sensible idea that prosperity depends on both smart, egalitarian action by a not-all-powerful government and a dynamic market operating within sensible limits.
“Too much state — and the dynamism disappears. Too much market — and both wealth and power get concentrated among the richest. When economic gain takes priority over all sorts of other competing goods, from clean air and clean water to the dignified treatment of every citizen, a lot gets lost. And excessive deregulation can lead to such calamities as the financial crisis of 2008.”
Just about everything in this description of the problem is wrong, seriously wrong. Are banks that have government-issues deposit insurance part of the free market? Were the government bailouts that rescued the huge banks from their own greed and stupidity in the financial crisis part of the free market?
The basic problem that Dionne and just about everyone else who writes for a major media outlet insists on obscuring is that there is no market apart from how the government has defined it. This should be obvious to anyone who has taken three minutes to think about the issue, but that is apparently too much to ask from our great minds.
Do corporations exist in a free market? That’s not a rhetorical question. We might say that in a free market individuals can choose to work together and form partnerships, but to create a free-standing legal entity like a corporation, we need a government.
And if government allows for corporations, it also sets the rules for corporate governance. Our rules tend to be far more pro-management than in other countries, which is why our CEOs and other top management draw paychecks that are three or four times as high as in other countries.
If we had different rules, CEOs of major corporations might be pocketing $3 million or $4 million a year or instead of $30 million or $40 million. If we have rules of corporate governance that are less favorable to management, is that more government or less? And yes, this matters a great deal for what our distribution of income looks like.
Government also sets the rules for labor management relations. There seems to be a view that the government protects workers and unions. There is some truth to that, but it also protects employers.
In the United States, secondary boycotts are illegal. This means, for example, if the Teamsters union decided to honor a picket line at a factory, hotel, or restaurant, the union officers could be arrested and thrown in jail. (Let me save the nitpickers some trouble. They would not be arrested for telling workers to honor a picket line. They would be given a court order directing the union officers to say that they cannot tell workers to honor another union’s picket line. Then they would be arrested for defying the court order.)
Unions are far more powerful in a system of labor relations where secondary boycotts are legal. But our system of Big Government doesn’t allow them. Please tell me again who likes government and who likes the market.
Arguably the most important way in which the government shapes the market is by granting patent and copyright monopolies. It’s amazing how people who call themselves “liberal” or “progressive” can just treat these government-granted monopolies as simply being a natural part of the market. Patents and copyright serve a purpose, promoting innovation and creative work, but they are very clearly government policies. Even an elite intellectual should be able to recognize this.
And there is a huge amount of money involved with these monopolies. In the case of prescription drugs alone we will spend over $700 billion dollars for drugs and other pharmaceutical products, which would likely cost around $100 billion if they were sold in a free market without patent monopolies. The difference of $600 billion comes around $4,500 a year for every household in the country. In other words, it is real money.
When we factor in the additional cost that these monopolies add to the price of medical equipment, software, computers, smartphones, and a wide range of other products, we are talking about over $1 trillion a year. This is getting in the same neighborhood as all corporate profits in the United States. But somehow E.J Dionne and his fellow travelers want to tell us that the right just wants an unfettered market and to leave the government out of it.
And, for what it’s worth, the abundance boys don’t seem to have even noticed patent and copyright monopolies. If folks want abundance, getting rid of these government granted monopolies would be a great place to start. We would make many items cheap that are currently very expensive. Imagine the next breakthrough cancer drug selling for a few hundred dollars for a year’s treatment rather than tens or hundreds of thousands of dollars. Suppose all medical scans cost around $100 a piece and most software could be downloaded costlessly over the web.
These monopolies are also a huge factor in inequality. Bill Gates might still be working for a living if the government didn’t threaten to arrest people who made copies of Microsoft software without his permission. Poor people don’t get patent rents and royalties from copyrights.
And just to be clear, there are alternative mechanisms for supporting innovation and creative work. We can pay people, as the National Institutes of Health used to do to the tune of $50 billion a year before Elon Musk and the DOGE boys broke in.
The story goes beyond this. Print and broadcast media face liability for third party content. Section 230 gives Elon Musk and Mark Zuckerberg’s huge platforms protection from this liability. Is that somehow the unfettered market? That would be worth much less without this special protection.
Private equity has made many great fortunes by abusing bankruptcy laws. Last I looked, the unfettered market didn’t create bankruptcy laws. Different bankruptcy rules would mean much less money for private equity tycoons like Stephen Schwarzman and Leon Black. They would also mean fewer resources wasted in financial gaming, again a big thing for those of us interested in abundance.
I could go on (yeah, I’m talking my book [it’s free]), but the point should be clear. There is no such thing as an unfettered market. Government rules create the conditions under which the market operates. Different rules create different outcomes. The right has been rigging the rules for the last half-century to redistribute a massive amount of income upward. It’s understandable why they would want to say it’s just the free market.
It is difficult to understand why someone like Dionne, who ostensibly does not like this upward redistribution, would go along with this fiction. One thing is clear, since he can get these sorts of pieces in the Washington Post, and other elite intellectual types can get the same sort of lazy arguments in other major media outlets, there is no incentive for anyone to do serious thinking on this fundamental issue. That is unfortunate for those of us who actually want to see change and abundance.
This first appeared on Dean Baker’s Beat the Press blog.
The post Republicans Love the Government and Democrats Who Claim Otherwise are Jerks appeared first on CounterPunch.org.