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Busting Six Free-Market Fictions

Drawn from World Hunger: 10 Myths, by Frances Moore Lappe and Joseph Collins.

Being “free” sounds great—like being free to eat or to have a job at a living wage; so surely a “free market” is the way to ensure these important human freedoms. Right?

Unfortunately, what we call a free market can’t protect essential freedoms because it’s trapped in six enduring fictions. So let’s free ourselves, one fiction at a time.

One: A “free market” works best to meet human needs.

If by “free market” we mean one unbounded by rules, it does not exist. All market economies are governed by rules. In ours, no one is allowed to sell babies, trade with terrorists, or sell liquor across the street from your kid’s school.

While market rules are plentiful, one key, unspoken rule drives most economies today: Do what brings highest return to existing wealth—what garners the corporations’ executives and shareholders the greatest immediate gain. By this rule, wealth accrues to wealth until we end up in the United States with inequality more extreme than in Turkey or India; and in a world with two-thirds of adults trying to survive on 3 percent of global wealth.

In such a world, no matter how much food we grow, hunger is inevitable.

Two: Government necessarily impedes a vital market.

In truth, a market economy cannot thrive without government. Think of the essentials to economic success that government provides, from legal structure to infrastructure. As for government being bad for business, this can hardly be true if in economies ranking among the world’s most successful, government spending contributes a big part of the GDP. Take three of the five countries deemed most economically “competitive” by the business-oriented World Economic Forum: Switzerland, Finland, and Germany. In each, government spending accounts for about a third to more than half of the country’s GDP. And in the United States, which ranks fifth in global competitiveness, make that 40 percent.

A lot of government spending directly benefits an economy. Take Brazil. Each month, the government transfers a modest sum to poor women, if they keep their kids vaccinated and in school, directly addressing hunger. Every dollar spent on the program generates almost twice that amount in economic activity.

Three: A free market serves individual freedom.

In the 1980s, at UC Berkeley, I had the opportunity to debate perhaps America’s most celebrated “free market” champion, the late Milton Friedman, coauthor of Free to Choose. He claimed that the market serves freedom by enabling people to make choices based on their values.

I then pointed to the obvious. If true, the market serves human freedom only on one condition: that people have purchasing power to express their values in the market. Thus freedom, using Friedman’s own definition, actually expands as societies set rules ensuring that wealth is widely and fairly spread. By the same logic, a market operating without rules to prevent wealth from amassing at the very top denies most individuals’ “freedom to choose.” And, in many societies that includes the freedom to choose to eat.

Four: A free market gives us all the choices we need.

Before we celebrate too much, let’s consider some choices our market economy denies, illustrated in a metaphor borrowed from political philosopher Benjamin Barber:

In our market economy, we get to join a giant cafeteria line with plentiful dishes where—if we have the money—we can grab whatever appears appetizing. Great choices! But notice what we don’t get to choose. We cannot enter the kitchen and select the menu. For example, we don’t get to say, “No, it’s not more choices among processed foods that I want. I want more plentiful, and less expensive, fresh fruits and vegetables.”

True, our supermarkets typically carry thirty thousand items. Wow. But without “menu making” power via democratic government providing citizens a voice in public decisions, my choices—including those protecting my family’s health as well as healthy soil and water—are extremely limited.

Five: A free market maximizes a nation’s efficiency.

Few would call it efficient to put up new walls using stones plucked from the foundation, yet our farming practices result in almost two billion tons of topsoil being washed or blown away from U.S. cropland each year. Here and in too many other ways, our food economy is destroying the essentials our progeny will need tomorrow. Or ponder the extreme inefficiency of a world food economy in which only 3 percent of the calories in feed going to cattle end up returning to consumers in beef.

If we define efficiency as getting the most benefit from resources, human and natural, while ensuring their ongoing health, most modern-day economies are not “efficient.”

Six: The market is “value neutral.”

In the United States we say we value “democracy” and “life.” Yet, we leave access to food largely to a person’s capacity to buy food in a market that drives purchasing power into ever fewer hands. Thus 48 million Americans, lacking in purchasing power, live in households facing food insecurity.

But wait! Democracy means a voice for every citizen, and no one chooses uncertainty about where her or his next meal is coming from. Logically then, hunger and food insecurity belie democracy as a core value of our society. In America we also say we value “life,” but we then tolerate a market with wages so low that poverty is implicated in a death rate of US babies more than twice that of several Western European countries.

A society’s market is an unmistakable expression of its values.

So here we are, trapped in six dangerous fictions creating a highly unfree market, one that leaves many of us denied freedom, the freedom to realize our full potential on a healthy planet. They blind us from understanding that a well-functioning market—one able to end hunger—is impossible without democratic government. Ironically, the market-is-all-we-need dogma ends up destroying the very conditions necessary to realize the market’s prized strengths—openness, competition, and transparency.

In large part as a consequence of this dogma, now spreading far and wide, one-quarter of humanity now suffers nutritional deprivation in world of vast food abundance. This is what I mean by “dangerous” fictions—ideas that are literally killing us that we can crack open and leave behind.

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