Corporatism Is Not the Free Market

February 5th, 2012

I wish that I had a nickel for every imbecile (and university faculty member and student) who didn’t understand this.

Via: Reason:

When a front-running presidential contender tells the country that thanks to Barack Obama, “[w]e are only inches away from ceasing to be a free market economy,” one is left scratching one’s head. How refreshing it is, then, to hear a prominent establishment economist—a Nobel laureate yet—tell it straight:

The managerial state has assumed responsibility for looking after everything from the incomes of the middle class to the profitability of large corporations to industrial advancement. This system . . . is . . . an economic order that harks back to Bismarck in the late nineteenth century and Mussolini in the twentieth: corporatism.

Columbia University Professor Edmund S. Phelps, who won the 2006 Nobel Prize in economics, and his coauthor, Saifedean Ammous, assistant professor of economics at the Lebanese American University, write that the U.S. economy ceased to be a free market some time ago, yet the free market is blamed for the economic crisis. (The real question is whether it was ever really free.)

Phelps and Ammous condemn corporatism unequivocally.

In various ways, corporatism chokes off the dynamism that makes for engaging work, faster economic growth, and greater opportunity and inclusiveness. It maintains lethargic, wasteful, unproductive, and well-connected firms at the expense of dynamic newcomers and outsiders, and favors declared goals such as industrialization, economic development, and national greatness over individuals’ economic freedom and responsibility. Today, airlines, auto manufacturers, agricultural companies, media, investment banks, hedge funds, and much more has [sic] at some point been deemed too important to weather the free market on its own, receiving a helping hand from government in the name of the “public good.”

One Response to “Corporatism Is Not the Free Market”

  1. Miraculix says:

    Lest we forget some of the more salient historical lessons, none other than that paragon of American triumphalism — Rockefeller Senior — considered competition a “sin”.

    I’ve been using the term “USSA” since high school in the early eighties. A grand total of perhaps two individuals have actually grokked my meaning.

    The vast majority simply reveal which flavor of programming they prefer by virtue of the direction in which they misunderstand the larger implications of said meme-breaking acronym.

    Naturally, any discussion of arch-industrialists and banking families providing funding to both sides in every major geo-political “conflict” over the last century (much longer, actually) is met with disbelief, disdain or outright scorn.

    Today, any such inference or casually name-dropping with monikers like Rothschild or their ilk is the fastest way to bring the ultimate modern term of disparagement — “conspiracy theorist” — bubbling instantly to the surface.

    And yet, we read of individuals singled-out, arrested, detained and accused of “terrorism” for idiotically misunderstood text-messages and e-mails. Despite this, the long-rumored and officially denied “ECHELON” system and its contemporary offshoots remain the stuff of conspiracy.

    Copper-tops, the lot of them.

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