The 'free market' lost in the free market
Economics for Babies #0: "Markets"
Imagine: your society is able to produce everything it needs, from delicious fruits and vegetables to massive airplane fuselages — and able to do so when they decide to. A lofty yet noble goal, and one that Ezra Klein and Derek Thompson share in their re-brand of the current neoliberal world order, Abundance. However niche this tome of a book may seem, these two craven liberal theorists are important enough to advise prominent Demonrats, and therefore, some of the premises contained within this unfathomably basic book are worth dissecting.
Abundance releases at the same time that the market first fully feels the impact of the Trump Tariffs — tariffs whose short-term impact will likely impede their ultimate goal: augmenting domestic production capacity. While it is funny that both the left and right wings of the capitalist so called-intelligentsia have arrived at the same conclusion, it is decidedly not funny to hear adults speak about political-economy like mewling children: with either pedantic obfuscation or simplicity not demonstrated since Europe’s pre-capitalist “dark ages.1”
In order to redress this festering problem of “peasant brain” in contemporary political economy, I am introducing a new series called Economics for Babies in hopes that if I can’t reach those in need at the upper echelons of power, I can at least help explain why these cynical and/or really dumb decisions are made. This is the inaugural entry in Economics for Babies!
Mr. Market Goes to Town
The problem with words is that they have to mean things2. The concept of a ‘free market,’ an ever-unrealizable ideal yearned after both rhetorically and juridically after the Keynesian swing, is largely unachievable in the material world. It is not hard to understand why. Extrapolate out a libertarian worldview from their premises and you will very quickly arrive at legalized slavery contracts and repealing age of consent laws. Even the given logic of capitalist production showcases this contradiction: labor is necessary to create value but it must be increasingly exploited to extract more value. Buy low, sell high applies to wages, too, as the commodity form of labor power, and that is one of the easiest ways that capitalists seek to squeeze increasing amounts or increased ratios of surplus value (or, as capitalists know it, profit3) from their production processes.
Battling each other out in the open marketplace, capitalists (and the capitals they personify) are forced into the oft-studied competitive market where victors remain in the ring, growing fat through accumulation. Violently edging each other4 out for marginal market share, these firms found fast ways to stack cash by off-shoring their production capacities to the global south because labor is the primary driver of cost for businesses and shipping goods back and forth was still not as expensive as paying American wages to manufacture domestically. From this, they bought back stocks, paid CEOs, and raised prices on consumers, all while actively making their products worse.
How could this hodge-podge of sclerotic, insular traders, executives, and capitalists hope to compete against the organized might of the Chinese Communist Party? With centrally-guided production and distribution, the Chinese Socialist government lifted nearly a BILLION people out of poverty, modernized their society beyond that of a majority of Western capitalist countries, and now dominates the global manufacturing market both in quantity and in quality. The U.S. never stood a chance.
“The concept of a ‘free market’… is largely unachievable in the material world.”
The malicious (and usually malformed) economists that led America’s rapacious finance regime to pillage the world utilized the doctrine of ‘free trade’5 as their aegis to destroy dozens of democratically-elected governments across Latin America, Africa, and Central Asia. However, now, due to the… creative mind of President Donald J. Trump, we will potentially see a decrease in dollar and cultural dominance of America thanks to the crazy tariffs (that will be discussed in a future installment of Economics for Babies). Once described by Mao Zedong as a ‘Paper Tiger’, America seems content to hasten its death by a thousand cuts by hacking off some limbs all on our own.
For clarification, it was largely a ‘dark ages’ because of the social control exerted by various conservative social institutions including the Catholic Church. Elsewhere in the world during the so-called ‘dark ages,’ Mali was richer than any other country in the world at the time and Central American civilizations had developed plumbing and irrigation.
Obviously, this is a challenge for many Americans; due to attacks on public education and the inefficiency of the system itself, U.S. adults are on average reading at about an 8th grade level, and it is only getting worse.
We will discuss surplus value more in-depth in another post, but if we are being honest, this is a topic that a baby may not be faulted for not understanding. Marx’s untitled fourth volume (ala Led Zeppelin) of Capital is longer than the previous three combined and deals exclusively with surplus value.
Pause?
For explicit critique of free trade relations and development, see “On the Question of Free Trade” by Friedrich Engels.