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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Monday, September 05, 2005

Parenti: "How the Free Market [sic] Killed New Orleans"

Via Freiheit und Wissen, and Keith Preston. Here's an utterly appalling commentary piece by Michael Parenti at Zmag: "How the Free Market 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.

Parenti continues:

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.


Blogger Unknown said...

What is so telling about Parenti's comments concerning the free market is that he chooses an example of the coordination of government agencies during the disaster. It might at first seem odd that he takes the failure of these clearly public sector agencies as an indictment of the market. But he seems to be saying that in this case the public sector tried to coordinate like the market and 'look how awful it turned out.' For Parenti, it seems, the issue isn't public vs. private firms--rather it is centralized vs. decentralized coordination. He thinks that SOMEBODY must be running this show, but in the market there's no central authority. And that's what truly pisses him off. He is a centralist, authoritarian socialist of the old school.

September 05, 2005 10:50 AM  
Anonymous Anonymous said...

"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."

Yes, IF it had allocated government spending more wisely and efficienty than the federal government did, even though in such a situation there would be less money overall.

Lousiania actually has more government money that it would have without the existence of a large federal government (this is a gross simplification that leaves out complex economic interactions, but it will do for now). This is because Lousiania is one of the "net beneficiaries" of federal spending. It receives more back from the federal government in spending than it pays in taxes. The money coming back, of course, has all sorts of strings attached on what it must be spend on, which apparently wasn't the levees.

September 05, 2005 11:04 AM  
Blogger Johnny Lemuria said...

I have been fiding this same rant on a lot of different forums. I've just been replying to them myself until now. I think I will now be linking to this post as well. Thanks, Mutualist Blog!

September 05, 2005 1:14 PM  
Anonymous Anonymous said...

While I generally agree with everything on this site in theory I find it not terribly practical here in the real world. This rant about Parenti is a perfect example. First, you have all missed Parenti's point here. He is saying that the "free market" as defined by Republicans has left a government that, while large in the military/police state sense, is very small in the sense of protecting its citizens, the most basic justification for government's existance. And the work by the Coast Guard, the NOPD, and various private groups and individuals was not enough because there was no coordination and no one with enough resources to rescue people in time. A bigger effort on the part of the feds to improve the levee system and repair wetlands would have made the impact of Katrina much less, and a bigger effort on the part of FEMA would have made a better rescue.

September 09, 2005 4:40 PM  
Blogger Joel Schlosberg said...

I've long been very leery of Parenti and his popularity on the left—see, for example, this review of Parenti's pro-Soviet Union book Blackshirts and Reds; and here, here, and here for his whitewashing of Milosevic's regime. Also fun is his book on "superpatriotism" in which he gives William "Big Bill" Haywood as an example of a "good patriot", when Haywood's actual opinion on patriotism is given by this statement:

"You ask me why the IWW is not patriotic to the United States. If you were a bum without a blanket; if you had left your wife and kids when you went west for a job, and had never located them since; if your job had never kept you long enough in a place to qualify to vote; if you slept in a lousy, sour bunkhouse, and ate food just as rotten as they could give you and get by with it; if deputy sheriffs shot your cooking cans full of holes and spilled your grub on the ground; if your wages were lowered on you when the bosses thought they had you down...if every person who represented law and order and the nation beat you up, railroaded you to jail, and the good Christian people cheered and told them to go to it, how in hell do you expect a man to be patriotic? This war is a businessman's war and we don't see why we should go out and get shot in order to save the lovely state of affairs that we now enjoy."

I've thought it curious how he's maintained a reputation among lefties as being some sort of progressive despite his rigid "hard left", pro-Soviet Union and company style Communist stance. So while I'm not suprised, what's really worrying is how many lefty Zmag readers will be nodding their heads at this brilliant debunking of the nasty "Bushite reactionaries".

It's hilarious how perfunctory his attempts to tie in free market ideas are, just a few catch phrases like "the invisible hand" and "self-interest" (with the typical BS about how self-interest, in which people go after their "own personal interests", operates in an atomized way rather than by forming cooperative coalitions, "unions of egoists" as Stirner would put it). Kevin's original post also didn't mention Parenti's reference to the poverty in New Orleans being due to "high prices, high rents, and regressive taxes"—as if all three didn't have to do directly or indirectly to government monopolies. It's also typical to see his dismissiveness of the effectiveness of "private charity", despite his frequent appearance on the listener-sponsored (and hence an example of such "private charity" and the independence it offers) radio station WBAI.

dave, the point is that Parenti's definition of "the free market" is the same as that of the Republicans. The irony that is so abundant in Parenti's description of the workings of the "invisible hand" is absent when he's describing the present system as a "free market". There's very little difference between agreeing with Kevin in theory and Parenti in practice, and just agreeing with Parenti; the whole point is that mutualist means can be an alternative to both state and capitalist corporation right now, in "the real world". See, for example, Kevin's recent post about a NY Times article on mutual health organizations in Africa that are providing health care where the governments' health systems have failed.

September 12, 2005 5:55 AM  

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