Parenti: "How the Free Market [sic] Killed New Orleans"
The free market played a crucial role in the destruction of New Orleans and the death of thousands of its residents. Forewarned that a momentous (force 5) hurricane was going to hit that city and surrounding areas, what did officials do? They played the free market.
They announced that everyone should evacuate. Everyone was expected to devise their own way out of the disaster area by private means, just like people do when disaster hits free-market Third World countries.
It is a beautiful thing this free market in which every individual pursues his or her own personal interests and thereby effects an optimal outcome for the entire society. Thus does the invisible hand work its wonders in mysterious ways.
Using the term "free market" in reference to America's corporate economy or the global neoliberal system is an obscene joke. But in such usage of the term, Parenti has a lot in common with corporate apologists on the right. "Free market," as Albert Nock observed many years ago, is an "impostor term."
Let the incidence of exploitation show the first sign of shifting, and we hear at once from one source of "interested clamours and sophistry" that... the unparalleled excellences of our civilization have come about solely through a policy of "rugged individualism," carried out under terms of "free competition"; while from another source we hear that the enormities of laissez-faire have ground the faces of the poor, and obstructed entrance into the More Abundant Life.
In a footnote to this passage, he elaborated:
....no policy of rugged individualism has ever existed; the most that rugged individualism has done to distinguish itself has been by way of running to the State for some form of economic advantage. If the reader has any curiosity about this, let him look up the number of American business enterprises that have made a success unaided by the political means, or the number of fortunes accumulated without such aid. Laissez-faire has become a term of pure opprobrium; those who use it either do not know what it means, or else wilfully pervert it.
Big business has a vested interest in claiming its present size and power came about through the "free market," and that it's really opposed to government intervention in the economy ("Please don't fling me in that briar patch, Brer Fox!"). The statist left, likewise, has a vested interest in claiming that big business emerged from a "laissez-faire" economy and that government regulation is necessary to restrain it. Art Schlesinger-style big government liberals and pro-corporate Randroids are engaged in a mirror-imaged version of the same morality play, but with the good guys and bad guys reversed.
Questions arose that the free market seem incapable of answering: Who was in charge of the rescue operation? Why so few helicopters and just a scattering of Coast Guard rescuers? Why did it take helicopters five hours to lift six people out of one hospital? When would the rescue operation gather some steam? Where were the feds? The state troopers? The National Guard? Where were the buses and trucks? the shelters and portable toilets? The medical supplies and water?
And where was Homeland Security? What has Homeland Security done with the $33.8 billions allocated to it in fiscal 2005? By Day Four, almost all the major media were reporting that the federal government’s response was “a national disgrace.”
Um, remind me again--which sector do the Coast Guard, state troopers, National Guard, and Homeland Security belong to? Government incompetence in allocating the resources it already has doesn't strike me as a very effective indictment of the "free market." As someone observed recently on a discussion list (I'm too lazy to look it up), New Orleans could have shored up its levees and been prepared up the wazoo with a tenth of the tax money it sends to the federal government.
Large corporations, like all large organizations, are inefficient and irrationally run. I've written about it before ("The Irrationality of Large-Scale Organizations"). But the rapacity of big business, its exploitation of labor and consumers, in fact its very existence, are possible only because it has big government in its service. Government subsidizes many of the operating costs of big business, as recounted by James O'Connor in Fiscal Crisis of the State. Through regulatory cartelization, patents, and other legal privileges, it protects big business from free market competition, and insulates them from the competitive disadvantages that would otherwise result from their inefficiency costs and diseconomies of large scale. By subsidizing high-tech, capital-intensive forms of production, and subsidizing technical education, it promotes the deskilling of labor and technological unemployment. By subsidizing the export of capital, it promotes de-industrialization. The state, by definition, is the executive committee of some ruling class--in Cuba as well as the U.S. And for reasons that Robert Michels pointed out long ago, the majority of producers can never be the ruling class.
In a free market, most large corporations would be bankrupt in months as a result of their inefficiency, and we'd have a radically decentralized economy of local production for local use.
What's true of big business is true of big government, the monopoly of monopolies: any business firm on a free market that allocated its resources as incompetently as the federal government's disaster relief agencies would be in Chapter Eleven, and its management would probably be under criminal indictment as well.
I recently heard someone complain, “Bush is trying to save the world when he can’t even take care of his own people here at home.” Not quite true. He certainly does take very good care of his own people, that tiny fraction of one percent, the superrich. It’s just that the working people of New Orleans do not number among them.
The last I heard, government "taking care of the superrich"--although that's certainly what government does, all right--didn't have much to do with the free market.
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