Aaron Regunberg: Even Bush Called It Voodoo

Aaron Regunberg: Even Bush Called It Voodoo

If you watched any of the Republican presidential debates this last week, you were probably not surprised to hear a lot of references to the free market. From Ron Paul’s fervent opposition to FEMA because it distorts the market’s natural response to disasters, to Rick Santorum’s claims that dismantling programs like food stamps and affordable housing will help the poor, there is a clear belief shared by these candidates that this vague entity, the market, can right all wrongs.

And this isn’t just the leading belief within the GOP; just a few days before the most recent Republican debate, our Democratic president touted his new jobs bill with a speech that stressed, as much as any other initiative, the need to cut regulations on business and ratify several new free trade agreements. And we’re all familiar with the Democratic-controlled legislature’s continued attempts here in Rhode Island to dismantle our state’s social safety net in order to continue tax cuts for the most wealthy.

Our society certainly seems to be dominated by a foundational belief that markets are these mystical, natural ecosystems and that by making the market ‘freer’—that is, more independent of human influence—we can bring our ecosystem back into an equilibrium that will sort out all of our problems and guide us into the best of all possible worlds.

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It is a striking consensus for us to have settled on, particularly considering that we’re still in an economic crisis created in large part by the deregulation of the financial sector. Given how recently this Greenspanianideology toppled our nation’s economy, our persistent devotion to the power of the free market seems to me less like a rational understanding of how the world actually works and more like a sort of religious blind faith in the supernatural.

Faith And Markets

Actually, the connection between faith and markets goes back a long way. Recently I read an essay by the scholar Gordon Bigelow called “Let There Be Markets” exploring free market ideology’s roots in evangelicalism. It turns out that evangelicals were an ascendant force in British politics when Adam Smith published The Wealth of Nations. And, by the time David Ricardo released his famous Principles of Political Economy and Taxation in 1817, they had become the dominant power in British economic policy.

The British evangelicals believed in a providential god and a just universe, and the idea of an all-powerful free market fit in perfectly with this worldview, providing a miraculous instrument to legitimate what anyone who has read a Dickens novel knows was not a very just society. If, in fact, there existed a mystical system that rewarded good Christian behavior and punished the slothful unrepentant, then these middle- and upper-class evangelicals could rest at ease knowing that poor people were poor for a reason. This, in turn, gave them the freedom to enjoy god’s rewards of wealth without having to feel any guilt for exploiting an economic system that left so many destitute and miserable.

Nowhere can the power of this faith-based conviction in market forces be seen more clearly than in the narrative of the Irish Potato Famine, which Bigelow’s essay describes in depth. The Tory administration in control of Britain when the famine began responded to initial reports of starvation in Ireland by importing cornmeal from America and selling it cheaply to wholesalers, which was effective in staving off disaster.

But in 1846, the Tories were succeeded by a Whig government led by fervent evangelicals. The new administration called the cornmeal program a “monstrous centralization” (sound like a familiar conservative way to brand a vital social program?) and said this intervention into the free market would simply perpetuate the problems of the Irish poor, whose backwardness and self-indulgent dependence on potatoes had led to the crisis. They believed that the fear of starvation would force farmers off their land and, in so doing, stimulate manufacturing. So they stopped the supply of food.

The British put their faith in the natural balance of an open market to create the best outcome, and we all know how that went—food prices skyrocketed, private charities were overwhelmed, and around a million people died, starving by the side of the road. Not exactly the optimal public welfare that unfettered markets are supposed to create.

A Powerful Lesson

I think this history holds a powerful lesson for us today. When Republicans (or, for that matter, most Democrats) talk about “the market,” they are referring to a completely imaginary place where equilibrium rules and the fairest outcomes occur spontaneously, as if ordained by god. But that’s just not the case. In Bigelow’s words:

"Markets are not spontaneous features of nature; they are creations of human civilization, like, for example, skating rinks. A right-wing theorist will tell you that the regular circulation of skaters around the rink, dodging small children, quietly adjusting speed and direction, is a spontaneous natural order.

But that orderly pattern on the ice comes from a series of human acts and interventions: the sign on the gate that says “stay to the right,” the manager who kicks out the rowdy teenagers. Economies exist because human beings create them. The claim that markets are products of higher-order law, products of nature or of divine will, simply lends legitimacy to one particularly extreme view of politics and society."

The first evangelicals fought for free markets because they believed an invisible hand would encourage virtuous behavior. But this is the real world, and we don’t have to go back to the Irish Potato Famine to see the gaps in this ideology.

Voodoo Economics

Submitting ourselves to a dogma claiming that private interest promotes public welfare has led to a world in which those whose greed pushed our economy into ruin just a few short years ago are free to continue flying in their private jets, while millions of Americans working full-time jobs still live out their lives in poverty.

We can’t afford to continue trusting in a set of beliefs that even George H. W. Bush referred to as voodoo economics. It’s time to bring a modicum of common sense back into our policy debate, both nationally and here in Rhode Island. It’s time to get real about what markets are—imperfect, man-made institutions like any other—and what they can and cannot do. And it’s time to call out this radical, free market ideology for what it truly is: a cult, and an incredibly dangerous one, at that.