Market fundamentalism

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Market fundamentalism, also known as free-market fundamentalism, is a term applied to a strong belief in the ability of unregulated laissez-faire or free-market capitalist policies to solve most economic and social problems.[1]

Origins and use[edit]

Palagummi Sainath believes Jeremy Seabrook, a journalist and campaigner, first used the term.[2] The term was used by Jonathan Benthall in an Anthropology Today editorial in 1991[3] and by John Langmore and John Quiggin in their 1994 book Work for All.[4]

According to economist John Quiggin, the standard features of economic fundamentalist rhetoric are dogmatic assertions combined with the claim that anyone who holds contrary views is not a real economist.[5] However, Kozul-Wright states in his book The Resistible Rise of Market Fundamentalism that the "ineluctability of market forces" neoliberals and conservative politicians tend to stress and their confidence on a chosen policy rest on a "mixture of implicit and hidden assumptions, myths about the history of their own countries' economic development, and special interests camouflaged in their rhetoric of general good".[6] The sociologists Fred L. Block and Margaret Somers use the label "because the term conveys the quasi-religious certainty expressed by contemporary advocates of market self-regulation".[7]

Joseph Stiglitz used the term in his autobiographical essay in acceptance of Nobel Memorial Prize in Economic Sciences to criticize some International Monetary Fund policies, arguing: "More broadly, the IMF was advocating a set of policies which is generally referred to alternatively as the Washington consensus, the neo-liberal doctrines, or market fundamentalism, based on an incorrect understanding of economic theory and (what I viewed) as an inadequate interpretation of the historical data".[8]

The theories that I (and others) helped develop explained why unfettered markets often not only do not lead to social justice, but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation of Adam Smith's invisible hand: individuals and firms, in the pursuit of their self-interest, are not necessarily, or in general, led as if by an invisible hand, to economic efficiency.[9]

— Joseph Stiglitz

Critics of laissez-faire policies have used the term to denote what they perceive as a misguided belief or deliberate deception that capitalist free markets provide the greatest possible equity and prosperity,[10] or the view that any interference with the market process decreases social well being. Users of the term include adherents of interventionist, mixed economy and protectionist positions[11] as well as billionaires such as George Soros;[12] economists such as Nobel Laureates Joseph Stiglitz[13] and Paul Krugman; and Cornell University historian Edward E. Baptist. Soros suggests that market fundamentalism includes the belief that the best interests in a given society are achieved by allowing its participants to pursue their own financial self-interest with no restraint or regulatory oversight.[1][14]

Critics claim that in modern society with worldwide conglomerates, or even merely large companies, the individual has no protection against fraud nor harm caused by products that maximize income by imposing externalities on the individual consumer as well as society. Historian Edward E. Baptist contends that "unrestrained domination of market forces can sometimes amplify existing forms of oppression into something more horrific" such as slavery and that "market fundamentalism doesn't always provide the best solution for every economic or social problem".[15]

See also[edit]

References[edit]

  1. ^ a b Block,Fred. Market Fundamentalism, Longview Institute
  2. ^ Sainath, P. And then there was the market.
  3. ^ Benthall, Jonathan, "Inside information on 'the market'", Anthropology Today, 7.4, August 1991, pp.1–2.
  4. ^ Quiggin, John. "Work For All – Reply". Retrieved 30 January 2012.
  5. ^ Quiggin, John. Rationalism and Rationality in Economics, 1999, On Line Opinion,www.onlineopinion.com.au
  6. ^ Kozul-Wright, Richard and Rayment, Paul. The Resistible Rise of Market Fundamentalism: Rethinking Development Policy in an Unbalanced World. London: Zed Books Ltd, 2007 p. 14 and Chapter 6
  7. ^ Fred Block and Margaret R. Somers. The Power of Market Fundamentalism: Karl Polanyi's Critique. Harvard University Press, 2014. ISBN 0674050711. p. 3.
  8. ^ Autobiographical essay in acceptance of the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel
  9. ^ "Stiglitz, Joseph E. The pact with the devil. Beppe Grillo's Friends interview". Archived from the original on 2015-01-24. Retrieved 2013-10-29.
  10. ^ Block,Fred. Reframing the Political Battle: Market Fundamentalism vs. Moral Economy, Longview Institute
  11. ^ Bidstrup, Scott. Free Market Fundamentalism: Friedman, Pinochet and the "Chilean Miracle", Revised 10/15/02
  12. ^ Beams, Nick. Soros warns of "market fundamentalism". WSWS : News & Analysis : World Economy 22 December 1998
  13. ^ Stiglitz, Joseph. Redefining the Role of the State - What should it do ? How should it do it ? And how should these decisions be made? Paper presented at the Tenth Anniversary of MITI Research Institute, Tokyo, March 1998. Archived 2008-05-29 at the Wayback Machine
  14. ^ Soros, George, "The worst market crisis in 60 years." Financial Times, January 22, 2008 19:57
  15. ^ Edward Baptist (September 7, 2014). What the Economist Doesn't Get About Slavery—And My Book. Politico. Retrieved May 23, 2015.

Bibliography and further reading[edit]

External links[edit]