The Biggest Lie in the World and a Few Truths

March 19, 2010 12:00 am Published by Leave your thoughts

Recently, at the public discussion following a screening of the excellent and disturbing Oscar-nominated documentary “Food, Inc.”, a United Nations agency economist replied to a question I had asked with the mantra of our times. “The market”, he stated, as if he were announcing that the Bible says God created the Heavens and the Earth, “is the best way to allocate resources.”

I am so tired of hearing this that it takes self-control to not hit the keys on my computer keyboard too hard as I type this. It’s not true. This seems so self-evident to me, and so evident from the overwhelming evidence accumulated in a recent experiment called “the planet Earth” carried out by six billion human beings, that it is infuriating to have to refute this fundamentalist faith masquerading as a scientific conclusion drawn from data.

Consider the following:

The 250 richest people on Earth have more income and wealth than the 3 billion poorest, or half the population.

Two separate studies, one academic, the other by a worldwide Church federation called Jubilee 2000, have found that 6-7 million children die every year as a result of the Structural Adjustment Programs of the International Monetary Fund and World Bank, namely neoliberal, pro-free market policies. These are imposed on peoples around the world using their countries’ debts as leverage to hold them hostage to such policies (as is now happening in Greece). This is a Holocaust every year for roughly 20-25 years of SAPs, but even if these are wildly inaccurate and the real number is one tenth of that we have a Holocaust every ten years, just speaking of children.

There are more slaves in the world today than have ever existed at any one time ever before – 27 million is the most conservative estimate, that of the activist and scholar Kevin Bales, but others, counting forms of child labor, prison labor and related forms of coerced labor see the number as much higher. Either way, more slaves today then ever.

While exact numbers are impossible to get, agencies ranging from the US State Dept. to the UN find that between 800,000 and 2.4 million people, mainly women, are trafficked across national borders every year.

In the United States, the richest 1% of the population has reached 24% of national income, roughly what it made in 1929, the previous record. In order to have a financial crisis, you must first have as a precondition such a vast inequality of income so that enough money is accumulated in few hands for a bubble to happen, as John Kenneth Gailbraith showed long ago in his study of the Crash of ’29. In Britain inequality has reached the levels of pre-World War II Britain, and soon it should be possible to pull out Karl Marx and Charles Dickens as readings in current events classes.

Tens of thousands of farmers in India continue to commit suicide as a direct result of the neoliberal policies adopted there since the late 80s.

In short, there has only ever been one form of organization worse than the market for allocating resources: Hitler and Mussolini. You would like me to name Stalin in this group as well wouldn’t you? Well, while it is tempting first to pull out my anti-Stalinist credentials (better than those of any conservative I would be willing to bet) I will not take that bait and go straight to the point: had the USSR had a free market system during World War II we would all be speaking German right now. The US and UK also had highly government-controlled systems of production and distribution during the War and won; today, using neoliberal, privatized armies they are losing – I have lost count, three or four wars.

A corollary of the mantra that the market allocates resources better than anything else is the sub-mantra “governments can’t pick winners”. I have not been much of a fan of governments most of the time to be honest, but a smear is a smear and the truth will out. Here is the record of winners picked by governments:

The invention of writing


The Pyramids – what! You think these were a big government boondoggle? First, they are still there – five thousand years later – how long do you think the accomplishments of the current form of civilization will be around? Any answer beyond another 20 would imply optimism on your part. In any case the NY Times recently interviewed a vendor who pointed out that the Pyramids still provide a living for him and his family, something the current government in Egypt has notably failed to do.

The Roman Empire – it was not very just, but it lasted a long time and we are still using many of its legal structures, religious legacies, aqueducts, and languages derived from Latin.

Gothic Cathedrals – as William Morris reminded us, the greatest public works project ever because it was based on control of work and the means of production by workers themselves and the result was staggering beauty. Has capitalism ever produced anything as magnificent?

The Great Wall of China (see Pyramids above)



The British National Health Service

The US Social Security – contrary to all elite opinion (that is, propaganda) it is not in financial trouble. It is funded as we go, and is more solvent than any government program anywhere in the world. Since wages fund it, it would be solvent indefinitely if wages went up, as they have not in the past 30 years in the US, there would be no problem, or if the tax were made progressive (more you make, more you pay) as it is not, or if the limit of how much of one’s income (only the first $100,000 more or less) that is taxed to pay for it – which in practice exempts the rich – were lifted. Or if we did all three.

The Internet

Oh yes, and before we forget, Christianity, Buddhism and Islam all of which were adopted as state religions, and which have lasted long enough to be put in the winner category. I remember when I first saw the superficial title to Thomas Friedman’s superficial book, “The Lexis and the Olive Tree” which was a peon to free trade and free markets and argued that Palestinians and Israelis shouldn’t fight over something as pointless as olive trees when the real money was in who could produce a Lexis auto in the shortest time for the lowest price. Brilliant. Aside from the fact that whoever does win that competition that is who wins it – so why should all the others put their resources into a losing competition? – someone forgot to tell Friedman that olive trees have been the basis of Mediterranean civilization for a very long time. Who knew we could find something that Israelis and Palestinians were both right about?

But governments per se are not the best way to allocate resources either. Democracy is. Why? Because everyone’s needs, points of view, abilities and knowledge can come into the mix, providing the best possible result, as well as a learning mechanism and the means to change decisions that didn’t work out well. Of course democracy here means a way of life, it means real citizen participation in decision-making and in terms of allocating all resources that means workers self-management of every kind of workplace, industrial, service, agricultural, transport, retail and yes, domestic labor or housework (with organization at the neighborhood level organized by direct assembly as is happening now in several countries in Latin America). It means control of elected officials from the bottom, through salaries that treat them as specialized skilled workers, and recall votes and referenda; assemblies of citizens that can decide, like the citizens of Porto Alegre, Brazil, on their budgetary and other needs and then delegate those decisions to elected representatives to be put into practice. That is the best way to allocate resources.

The market is the best way to prevent that from happening. That is the reason that “economic” decisions are increasingly made by unelected Central Bankers, or under pressure from investment markets and bond traders, why currencies’ values are determined by buying and selling instead of by elected decision-making. It is why organizations like the EU Commission and ECB, the IMF and World Bank, the WTO, and G20, are where the real choices get made, to prevent what is most efficient and just (and therefore best) way to allocate resources from happening – Hayek and Milton Friedman’s market is no natural occurrence, it exists to prevent the real natural, spontaneous form of government – skilled workers of all types controlling their work and making governmental decisions together considering each other’s needs, abilities and aspirations.

That is why capitalism needs bosses – without them, workers would do things like create modern Gothic Cathedrals and make sure everyone had enough to eat and a home they could stay in and that no one was trafficked or enslaved. When profit rules, instead of workers, every single profession, from cooking to software writing, from journalism to street sweeping, is no longer done to do the thing itself, governed by a worker that is a free being expressing their freedom, but instead is exploited, alienated labor done for a wage. So much for the best allocation of resources: the most important resource is ourselves, our ability to work freely, to work together, to create and do things of use to ourselves and others. That resource is openly abused every day by bosses who prevent us from organizing our own work as we would, and from rulers who prevent us from organizing our governments as we would. Free markets should be called what they really are – the worst of both worlds: anarchy with bosses. We are for democratic order. Those are the real sides in the world today.

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This post was written by Steven Colatrella

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