Debunking Myth #2: “Government obstructs the free market” Bunk! The choice is not government or free market, because government creates the market. ROBERT REICH JUN 7 Friends, Welcome back to our DEBUNK series. Last week, we saw how economics is inextricably connected to politics and morality — and the underlying questions are what we mean by a good society and how we achieve one. Today we’re debunking the myth that follows directly from the first one: that our system poses a choice between the free market or government, and that government intrudes on or obstructs the free market. Bunk! Please click on our short video above for today’s overview. The real choice is not between a free market and government. A so-called “free market” can’t exist without a government to organize and enforce it.  There’s no “free market” in nature — only a contest for survival. The most important choices concern how the government organizes and enforces the market — what the rules of the market are to be. Legislators, judges, and people working in the executive branch continuously decide on these rules. Rules have changed over time. In the 1800s and through much of the 1900s, human beings could be bought and sold as slaves. Debtors could be imprisoned. Monopolists were given free rein. Union organizers risked being shot. What are the key rules? Property rules determine what can be owned (or for how long) — human beings? Property that Native Americans once considered their hunting grounds? Songs? Recipes? Google’s algorithms? Antitrust rules determine what degree of monopoly is permissible. Can one person or corporation own a railroad, internet platform, airline, grocery chain, or natural resource that almost everyone depends on? Contract rules determine what can be exchanged and under what circumstances. Can I sell my child? My kidneys? My blood? Can I sell or buy sex? Is my employer allowed to limit my options for future employment or force me not to disclose something? Rules governing debt and bankruptcy determine what happens when borrowers can’t pay up. Can my creditors put me in prison or bondage? Can they charge me 300 percent interest on my debt? Can they take a percentage of my future earnings? There are also rules for labor unions, international trade, banking, corporate takeovers, corporate buybacks, and taxes. Rules like these have to be made in order for a market to exist. But who has the most influence over these rules? Over the past several decades, large corporations, Wall Street, and wealthy individuals have gained increasing influence over the rules. Their wealth has translated into political power. How? Follow the money. Corporate PAC spending has reached hundreds of millions of dollars a year. Business lobbyists now spend 68 times as much on lobbying as labor unions spend. Big corporations march into courtrooms with platoons of lawyers.  Between the 1930s and 1970s, America’s middle and lower-middle class offset the power of big corporations and the wealthy through labor unions, small businesses, small investors, and local political parties. Since then, though, all such centers of countervailing power have withered. Labor union membership has fallen from a third of private sector workers in the 1950s to just 6 percent in 2023. Small businesses have been replaced by giant big-box and online retailers. Small investors have been replaced by giant institutional investors: money market funds, index funds, university endowments, and pension funds. Political parties that were once anchored at the state and local levels have become giant Washington-based fundraising machines. Much of the power they once influenced to get out the vote and persuade voters to back specific candidates has shifted to giant social media platforms. That’s why the rules of the American economy are now largely determined by big corporations and individuals with great wealth. What’s been the result? Ever-larger upward distributions inside the market — from the poor, working, and middle classes to the top. We don’t notice them because they’re hidden from view behind a so-called “free market” that’s assumed to be neutral. But remember, the “free market” is not neutral. How it’s organized is a direct reflection of who wields power. Next week, we debunk the third myth. Thanks again for joining me today. I hope you’ll share our “debunk” series. And, if you’re able, help support our efforts by purchasing a paid subscription for yourself and a gift subscription for someone else.

In a democracy, we are the government

Brent Harold

Published May 25, 2021

One way to see Biden's ambitious agenda is that of an old guy wise enough to not care a lot about another term, transcending the politically calculating caution more typical of a younger politician.

Call it burnishing his legacy. Call it doing the right thing, as he sees it. That also happens to be the way most of the rest of us see it. Biden clearly sees victory in the election as a mandate to spend our tax money, our money, yours and mine, the way, in his judgement, we want it spent.

And he's right. As I read the polls, every one of these expensive programs—COVID-19 relief, the American Family Plan, the infrastructure bill, the George Floyd police reform bill— has been met with approval by a substantial majority of the people.

In giving us what we apparently want, Biden is doing exactly what Trumpsters and other conservatives are most afraid of in the entire world: inflicting Big Government socialism on innocent American patriots.

They make it sound like an alien Big Brother-style intervention. There are comparisons with FDR's Depression era spending and society-shaping changes.

It's not socialism, of course, except insofar as democracy itself is socialism: we the people collectively organized to do what we think should be done to enhance our lives, and more effectively practice life and liberty and pursue happiness.

That government expenditure is an alien intervention in our lives is a misleading, dangerous and self-fulfilling notion. Trump wanted his signature on the first pandemic relief checks because he wanted people to see him as the source of this largesse. It was an intervention but of the kindly leader sort.

The $1.9 trillion COVID-19 relief bill is not a handout. It is us, we the people, giving ourselves something we badly need. Same with other big-ticket programs. We have the money—it's our money—and this is how we want to spend it.

That's what government is. This is how it's supposed to work, its reason for being, as we all learned in secondary school from a scenario sketched out in a basic civics class. A bunch of folks get together in the State of Nature (a pre-government situation that probably never actually existed in human history):

“Let's face it, this every-person-for-themselves stuff sucks. We need things like roads, better protection from large predators and pandemics. Hey, maybe even universal healthcare system.”

“Sounds good. How do we get all that good stuff?”

“How about government?”

“Government? You mean where one guy gets to enslave everyone else and make them spend their lives building large pointed objects in the desert?”

“No, not that kind. The kind where we sign a contract to cooperate in securing the benefits of cooperation.”

Thus is born government of, by and for the people. In a big country, it may be cumbersome, it may be inefficient, but it's all ours. And our welfare is its only legitimate reason to exist.

And the much-maligned “big government”? That's just we the people getting big enough on our behalf when needed to do what needs to be done (survive the Great Depression, fight World War II, fight a pandemic).

There really is no other logic to democratic government. Government is us.

If many of us have lost track of that logic, if government no longer feels like it's ours, there are reasons. Government should increase happiness and prosperity, but salaries have gone down since the 1960s. We end up fighting wars most of us disapprove of. We give tax breaks to the wealthiest. Healthcare has improved but it's still the most expensive in the world, many millions without it.

If government is like a dog we have on a leash, that leash has gotten too long. (To jump metaphors, there's too much slippage in the clutch.) There's a sense that we've lost control. We need to close up loopholes such as the filibuster, Senate apportionment, Supreme Court appointment procedure, the Electoral College and other glitches leading to virtual minority rule. The constitution, it turns out, is not infallible.

But if the leash seems too long, we need not forget that there is a leash. My impression is that for too many of us, the leash feels shorter with Biden's agenda, his sense of doing the majority's bidding.

Democracy is just an ideal, but it's one that has endured at least in principle for almost 250 years. It gives us a shot. But only if we stay in touch with the idea itself. Government is not an alien intervention. It is us.

Brent Harold  a former English professor and writer, lives in Wellfleet. Email him at kinnacum@gmail.com