Monday, October 31, 2011

The Free Market Gambit

Imagine a game where every time your team kicked a goal, it was worth one point. But every time the opposite team kicked a goal, it was worth ten points. Then imagine that if you commit any sort of foul or breach of the rules, you’re instantly ejected from the game - but if the other side does, they just lose possession of the ball, no matter how many times or how egregiously they foul you. Then imagine that every ten minutes, the other team gets to flip a coin, and if it comes up heads they get to take all of your points, and if it comes up tails they just double their own score.

You don’t need to imagine such a game. This is the world that you live in every day. Sure, it wouldn’t be impossible for you to win at that game. If you were really, fantastically talented and they were disastrously incompetent, you might be able to compete on a serious level. But can you really make the claim that the game is in any sense fair? Can you really blame someone who tries to fix that system? That wants to level that playing field?

A lot of people have criticised the Occupy movements by pointing out how modern capitalist systems make it theoretically possible for someone who is born into relative poverty to pull themselves up by their bootstraps and become the richest person in the world - the implication (or, often, the explicit statement) being that they’re all lazy bums who want to redistribute wealth so they can sit around doing nothing. The only problem is that these people are almost all qualified and hard-working, and bootstrapping yourself to the economic stratosphere is theoretically possible in the same way that it’s theoretically possible to win Tattslotto.

Nobody is saying that pulling yourself up by your bootstraps isn’t possible. We’re just saying that the system is weighted heavily against that happening.

Proponents of free-market capitalism try to model it as a meritocracy - a system whereby the lazy and stupid will sink to the bottom of the pile, no matter how high they started, and where the smart and motivated will rise to the top, no matter how low they start. I do a lot on how people lie to you and how your brain facilitates this, but make no mistake - this is the biggest lie you were ever told.

You are taught from the moment you’re born that if you study hard, work hard, and play by the rules, one day you’ll rise to the top. Your parents and teachers drill this into you both explicitly and via conditioning, and undoubtedly your first few bosses - assuming you have the kind of menial job most of us have when we’re teenagers - will give you a powerful refresher course.

But of course, as most of us know by our early 20s, hard work and book-smarts rank fairly low on the list of things you need for success. Things like connections (“It’s not what you know, it’s who you know”) and seniority, which no amount of hard work will give you, matter more. Things like good bargaining skills, and having a good bargaining position, are taught to a tiny minority of people and are hugely important, too, because there is something you need to know about free market capitalism.

It isn’t free at all. When people invoke “Free-market capitalism” what they’re doing is trying to get the government to stop levelling the playing field, because they don’t want to give up their advantage. But mark my words, if they ever see an opportunity to get an advantage from the government, they do not stick to their moralistic free-market notions - and very often, whether or not people will come to your defence (either as a person or as an industry) depends solely on how much keeping you around will benefit them. This rings as true for politicians as it does for CEOs - you’ll see some politicians condemn workplace agreement regulations on the Monday but call to protect a local industry from foreign competition on the Tuesday.

Taxation systems, import tariffs, regulatory laws (for emissions, product labelling, etc), workplace relation laws - a huge number of our laws affect this system and are very often weighted much more for the benefit of corporations than for the people working for them. The system is not free, it is controlled - and it is being controlled for the benefit of those in power, not for you.

They claim the Free Market as the moral high ground; they profess that if an entity is able to succeed on its own it shouldn’t be restricted, and if an entity is failing then it deserves what it gets. This is as true of corporations as it is for people - it doesn’t matter how dirty they played to get it, successful people deserve their success; and it doesn’t matter how unfair the system is, poor people deserve to be poor.

The most abominable thing about this rhetoric is that it’s used on the lower- and middle-classes - and it actually works. People treat the mining companies as these fragile entities; oh, we can’t demand that they contribute their fair share, or they’ll put off workers! They’ll go elsewhere and ruin the economy! Firstly: no they fucking won’t, because it is the first rule of capitalism that if they could do things any cheaper (ie if they could fire half their staff) they already would have. They don’t just try to streamline their workforce in the face of new tax laws, they are trying to streamline their workforce every single day - they’re not doing anyone any favours by hiring people, they’re doing it because they have to.

But more importantly, people just fail to accurately weigh up the costs and benefits of these arrangements. Are we really better off with an enormous mining industry that contributes a pittance back in tax? Or would we be better with a slightly smaller mining industry (in the unlikely event that it happened) that contributed fairly? The mining industry employs fewer people than you might think. Similarly, the amount of money communities lose to problem gambling dwarfs how much the community benefits from the paltry sum given back to sporting clubs, or employing people in the hospitality industry.

As I said once before, anyone who thinks they’re free under modern capitalism is either rich or blind. The narrative that claims that the poor are just lazy and that CEOs deserve every penny is pure fiction, but it’s the most widely-believed fiction this side of the Bible. All the Occupiers want to do is make it a reality - make the system fair, so that those who deserve to be at the top really can rise, and so the reckless and inept fall to the bottom. That is our dream, and if you really think about it, I suspect that it’s yours as well.

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