One of the most deceptive ideas continuously sounded by the Right (and its fathomless think tanks and media outlets) is that the \u201cfree market\u201d is natural and inevitable, existing outside and beyond government. So whatever inequality or insecurity it generates is beyond our control. And whatever ways we might seek to reduce inequality or insecurity \u2014 to make the economy work for us \u2014 are unwarranted constraints on the market\u2019s freedom, and will inevitably go wrong.<\/p>\n
By this view, if some people aren\u2019t paid enough to live on, the market has determined they aren\u2019t worth enough. If others rake in billions, they must be worth it. If millions of Americans\u00a0remain unemployed or their paychecks are shrinking or they work two or three part-time jobs with no idea what they\u2019ll earn next month or next week, that\u2019s too bad; it\u2019s just the outcome of the market.<\/p>\n
According to this logic, government shouldn\u2019t intrude through minimum wages, high taxes on top earners, public spending to get people back to work, regulations on business, or anything else, because the \u201cfree market\u201d knows best.<\/p>\n
In reality, the \u201cfree market\u201d is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what\u2019s private and what\u2019s public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on.<\/p>\n
These rules don\u2019t exist in nature; they are human creations. Governments don\u2019t \u201cintrude\u201d on free markets; governments organize and maintain them. Markets aren\u2019t \u201cfree\u201d of rules; the rules define them.<\/p>\n
The interesting question is what the rules should seek to achieve. They can be designed to maximize efficiency (given the current distribution of resources), or growth (depending on what we\u2019re willing to sacrifice to obtain that growth), or fairness (depending on our ideas about a decent society). Or some combination of all three \u2014 which aren\u2019t necessarily in competition with one another. Evidence suggests, for example, that if prosperity were more widely shared, we\u2019d have faster growth.<\/p>\n
The rules can even be designed to entrench and enhance the wealth of a few at the top, and keep almost everyone else comparatively poor and economically insecure.<\/p>\n
Which brings us to the central political question: Who should decide on the rules, and their major purpose? If our democracy was working as it should, presumably our elected representatives, agency heads, and courts would be making the rules roughly according to what most of us want the rules to be. The economy would be working for us<\/i>.<\/p>\n
Instead, the rules are being made mainly by those with the power and resources to buy the politicians, regulatory heads, and even the courts (and the lawyers who appear before them). As income and wealth have concentrated at the top, so has political clout. And the most important clout is determining the rules of the game.<\/p>\n
Not incidentally, these are the same people who want you and most others to believe in the fiction of an immutable \u201cfree market.\u201d<\/p>\n
If we want to reduce the savage inequalities and insecurities that are now undermining our economy and democracy, we shouldn\u2019t be deterred by the myth of the \u201cfree market.\u201d We can make the economy work for us, rather than for only a few at the top. But in order to change the rules, we must exert the power that is supposed to be ours<\/p>\n
______________________<\/p>\n
Robert B. Reich, Chancellor\u2019s Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers \u201c<\/i>Aftershock” and \u201c<\/i>The Work of Nations.” His latest, “<\/i>Beyond Outrage,” is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause.<\/i><\/p>\n