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Free market intoxication

Anthropologists posit that the reason humankind created religion is to gain control over certain aspects of our lives and world over which we do not have agency. This idea refers not just to the organized religions of today, but also to any ritual aimed at affecting an event’s outcome through the help of a supernatural power.

There is, however, another human inclination that would seem to run counter to this cause for religion. That is our preference for the convenient option. This desire for convenience often directly contradicts our desire for agency. If the idea of creating religion is a proactive inclination to take the reins, and thus responsibility, choosing convenience is very often a passive inclination that results in people abdicating responsibility and putting off the hard work for someone else.

Yet although these two aspects of human nature seem to be contradictory, many examples from today’s world teach us that humans are all too capable of making them fit perfectly together. Although people use faith as a way to improve the world in a million ways on a delay basis, all too often, they also can use religion to avoid taking action or responsibility. A case in point is much of the argument against climate change, which insists that if God made the world then it couldn’t be fragile enough for us humans to ruin.

One of the less talked about places where this inclination is damaging is political ideology (although ideology is like religion in that people use it to find solutions to every problem and answers to every question). The synergy of the desires for control and convenience perhaps manifests itself most strongly today in the conservative movement’s obsession with free markets.

Lets take a look at what a market is and why believing in it is so attractive. Essentially, traditional economic theory says that people are rational decision makers who, when allowed to make decisions in their individual self-interest, will maximize the collective benefit and wealth of society. Adam Smith, the founder of modern economics, wrote that when everyone behaves in his or her self-interest, an “invisible hand” would maximize society’s welfare. It really is an attractive idea, because when boiled down to the simplified way that most people understand economics, it ends up meaning that I can do what I think is best for myself, purely based off of self-interest, and it will end up benefiting other people.

The problem is that the whole market idea requires an incentive structure that aligns with societal interest, and when it comes to the real world, economic systems are rarely so simple. Take the financial sector for instance. One of the big problems that contributed to the financial crisis was that worker pay was not aligned with the long-term health of the company. As a result, many people in finance made increasingly risky decisions that helped profits in the short run, and thus their personal incomes, but put at risk the firm’s health in the medium to long run.

Democrats suggested making laws that defined how financial workers’ salaries could be structured, Republicans cried socialism, rather than recognizing it as an attempt to fix a broken incentive structure. As someone who is left of center, I believe that markets are good but that they also need to be nurtured and maintained. I don’t think they can be organically perfect. Yet, this approach is more nuanced and requires a deeper understanding of public policy in general.

What Republicans have often done, however, is thrown this nuance completely out the window. By selling people on the idea that true free markets can exist, if only the government went away, people on the right have come to believe in a purely theoretical idea, the only real benefit being that it is convenient to believe in it. What this does is allow Republicans to completely abdicate responsibility for finding solutions to any of the nation’s problems, because the so-called “solutions” end up being inaction. Sprinkle the words freedom, liberty, and choice on top and their doctrine becomes intoxicatingly irresistible.

What they forget is that markets are simply collections of people making decisions. If people’s motives, incentives, and values are not aligned well, then the economy cannot function optimally. The market is not some just force that watches over us. Adam Smith’s invisible hand is not God.

Yet what conservative ideology has done is deified the market so that it is just that, God. Doing so allows people to act by not acting. It allows people to solve problems by doing nothing for others, buying into a philosophy that gives people control by maximizing their convenience at the same time. After all, there really is something calming about saying, “the market will take care of it.”

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