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I'm no economist, but I can recognize silly economic philosophies when I see them.  One that I keep running into is that of market fundamentalism, which in the current crazy climate, seems to be frequently rearing its head.  

Market fundamentalism is the notion that the free market, unfettered by regulation or other interference, is the only way to go to solve all of our problems, economic or otherwise.  

I actually didn't realize they even had a name for it when I ran into Utah State Representative Carl Wimmer last year. At the time, he was successfully pushing his bill which was trying to make sure that Utahns wouldn't benefit from federal health care reform legislation. For that interesting exchange, and other recent examples of this completely unserious, silly, yet deadly ideology being espoused follow me below the fold!

I was doing my first (and only) official lobbying at the state capitol building, when who did I somehow run into but Carl Wimmer, the guy who had put forth the bill we were complaining about (namely that the Utah legislature would have to approve implementation of federal health care reform - ha ha).  He was kind enough to engage in a discussion that revealed his market fundamentalism, it went something like this:

Me: "So your website says you think deregulation of the health insurance market will solve our health care problems, is that right?"

CW: "Yes, and if we could just sell insurance across state lines, that would really help things."

Me: "But what about my patients with preexisting conditions, don't you think some regulation that mandates fair policies for them is necessary, otherwise they're uninsurable!"

CW: "Well, no one ever died from lack of insurance, all they have to do is go to the ER and they'll get care."

Me: "Oh, yes they do die from lack of insurance, if they don't get the preventive care they need, they may show up at the ER, but often they do so while dying.  I've got a lady who only ever shows up at the ER, near death, luckily not yet dead, but she wouldn't be showing up there if she'd come in for regular visits and labs and treatment, but she doesn't show up for fear of the costs of these things."

CW: "Well that's the beauty of a market based solution, once we deregulate and sell insurance across state lines, some enterprising insurance executive is going to be the one to say to himself 'I'll tap into that huge pool of sick patients'".

Me: "What insurance company executive would be dumb enough to try to insure patients who are already sick, if they could avoid it?  Why offer an affordable policy to someone who may cost your business tens of thousands of dollars per year in medical care?"

CW: "Well, maybe you have a point on preexisting conditions."

Me: Proceed to explain how the rest of HCR falls into place from that..blah blah blah.

CW: "Gotta go" gives speech, passes bill.

As you can see from above, it's hard to defend this silly ideology, but it does provide a framework to give politicians policy ideas that can be quite deadly, if implemented.

What is quite frightening is that several figures who may soon be in control of future federal policy as potential US Senators have the same silly, deadly, ideology:

Rand Paul:

The bottom line is: I’m not an expert, so don’t give me the power in Washington to be making rules," Paul said at a recent campaign stop in response to questions about April’s deadly mining explosion in West Virginia..."You live here, and you have to work in the mines. You’d try to make good rules to protect your people here. If you don’t, I’m thinking that no one will apply for those jobs.

To a market fundamentalist, the unfettered market will take care of things, if coal owners and local officials make sloppy rules that don't really protect workers (as they did when thousands of miners per year died) then the market will ensure that less miners will apply for those jobs, and everything will be fine.  If a few thousand die because they can't find other jobs, it will be worth it, these fundamentalists might even consider them "defenders of liberty".

Sharron Angle:

   QUESTION: You have been in support of onshore drilling in the United States as well as offshore drilling, are you rethinking that policy with what is going on in Louisiana?

   ANGLE: No. I think that what happened in Louisiana was an accident. They're cleaning it up. We need to go forward and talk about prevention and not about whether we keep it out all together. We know that lot of the problems that have been caused for us with foreign policy and even with our own gas prices here domestically going up is our dependence upon foreign oil.

   We have oil reserves and petroleum reserves that we should tap into. And that's a policy that we really need to look at as a nation. How do we deregulate enough to invite our industries to come back into the United States and quit outsourcing their business?

Of course, in the wake of a deadly and environmentally disastrous oil spill, where deregulation has been implicated as a causal factor, more deregulation is the answer when you're a market fundamentalist.

Joe Miller:

But yeah — ultimately, we’ve got to transition out of the Social Security arrangement and go into more of a privatization.

The market will make for better retirements for everyone.  It doesn't make sense to have a retirement insurance plan that is independent from the all-knowing, never failing, free market.  Why did we come up with this plan in the first place?  Well, at least if we all had private retirement plans they'd be safer than some socialistic government scheme, since the market never falters.

Unfortunately, of course, this season has brought many other market fundamentalists out of the woodwork and near to power: Marco Rubio, Ken Buck, Christine O'Donnell, Jim Toomey, and Utah's own Mike Lee to name a few.  

I think that any fundamentalist ideology (if defined as strict adherence to principles even in the presence of contrary evidence) is inherently dangerous, and why humans hold to fundamentalist views is a very interesting discussion meriting another diary.  I just hope these current market fundamentalists are exposed enough to be voted down by rational people.

Originally posted to Ask 4 Questions on Tue Sep 21, 2010 at 05:35 AM PDT.

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Comment Preferences

  •  Yep, As I've Been Commenting, All Branches (8+ / 0-)

    of the conservative movement are fundamentalist.

    The Christianists obviously; the entire business and economic wing as you point out; also the Neocons and other militarists.

    They have to be fundamentalist and fall back on principles because there are no successful advanced countries that run on totally free trade, theocracy or as perpetually warring military empires.

    --Not successful for a large comfortable middle class with opportunity.

    Both parties support much of that conservative market fundamentalism. There's no party to take tax and regulatory policy back to before Reagan for example. So I don't expect it to be going away any time soon.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Sep 21, 2010 at 05:44:45 AM PDT

  •  Market fundamentalism (5+ / 0-)

    can essentially be summed up as "Let the chips fall where they may and the devil take the hindmost."  

    The reality is that it is government, through legal, regulatory, and fiscal frameworks, that creates markets.  These frameworks can favor one party disproportionately over another, which has been the case rather frequently since the founding of our nation, or they can protect the interests of different parties in the interest of fairness and justice.  

    I am not a member of the "Professional Left". I am a liberal Democrat and I vote!

    by Kurt from CMH on Tue Sep 21, 2010 at 06:46:06 AM PDT

  •  What attracts people to Market Fundamentalism (6+ / 0-)

    is it's simplicity. It's all so simple; in all cases, at all times, the Market will take care of it. The difference between market fundamentalism and other religious fundamentalism is that, because it deals with real issues in the here and now, market fundamentalism can be tested. In fact, it has been tested and it has failed. We've had 30 years now of government policy (mis)guided by market fundamentalism and the results are all around us. What kind of an idiot still clings to this faith ?

  •  A Point These Guys Never Seem to Get (5+ / 0-)

    Government rules and regulations were put in place for a reason.  We used to have an essentially laissez faire market economy.  (Except, of course, to the extent the robber barons created monopolies, which gave rise to antitrust laws.)  But it didn't work.  People ate contaminated meat and died -- hence the FDA.  Parents were so desperate they took their kids out of school and put them to work -- hence the child labor laws.  Companies sold patent medicines that didn't cure and sometimes killed -- hence drug regulaton.

    Anyone who has made even a cursory study of economics realizes that markets are not perfect, that there are externalities and discontinuities, and that in a complex industrial society consumers can't do all the due diligence necessary to protect themselves, without government regulations.  (Do I really want to have to set up a home laboratory to test my meat whenever I go to the grocery store?)

    The point is, these rules were put in place for a practical reason.  They weren't created by a bunch of do-gooders with too much time on their hands, they responded to real problems.  If we get rid of them, we'll go right back to the same problems.

    Case in point:  look what happened when Glass-Stegall and the other depression-era constraints on Wall Street were repealed.  We went right back to the same economic catastrophe.  

    "[W]e shall see the reign of witches pass over . . . and the people, recovering their true spirit, restore their government to its true principles." Jefferson

    by RenMin on Tue Sep 21, 2010 at 07:29:01 AM PDT

    •  No capitalist economy has ever been laissez-faire (2+ / 0-)
      Recommended by:
      Ask 4 Questions, Calamity Jean

      At least not in the purest sense; there have been varying degrees of government intervention, but there's always been some.

      If you think about, you really can't have a capitalist government without a state that can, at the very least, enforce contracts.  Otherwise, no business agreement is sound because one of the parties could always violate it with no repercussions.

      And if you look to our own nation's past, company owners were more than happy to ask for government intervention (court injunctions, armed militias, etc.) when their workers were striking.  Not very laissez-faire.

      Procrastination: Hard work often pays off after time, but laziness always pays off now.

      by Linnaeus on Tue Sep 21, 2010 at 07:44:02 AM PDT

      [ Parent ]

  •  One word with two very different meanings (2+ / 0-)
    Recommended by:
    Ask 4 Questions, Deep Texan

    In the economic realm, the word "fundamentalist" is very ambiguous.

    On the one hand is "market fundamentalism," which is what the diarist is writing about. Here's a short definition from Wikipedia:

    Market fundamentalism (also known as free market fundamentalism) is an exaggerated faith in the ability of unfettered laissez-faire or free market economic views or policies to solve economic and social problems. The term is used pejoratively.

    And, yes, it's a right-wing deeply-flawed philosophy, in my opinion.

    ---

    But there's another one:

    I don't own any stocks and I don't really follow the stock market, but I know the concept of fundamental analysis. Again, here's a Wikipedia definition:

    Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets.

    It's different from technical analysis:

    When the objective of the analysis is to determine what stock to buy and at what price, there are two basic methodologies:

    1. Fundamental analysis maintains that markets may misprice a security in the short run but that the "correct" price will eventually be reached. Profits can be made by trading the mispriced security and then waiting for the market to recognize its "mistake" and reprice the security.
    1. Technical analysis maintains that all information is reflected already in the stock price. Trends 'are your friend' and sentiment changes predate and predict trend changes. Investors' emotional responses to price movements lead to recognizable price chart patterns. Technical analysis does not care what the 'value' of a stock is. Their price predictions are only extrapolations from historical price patterns.

    For example, someone like Warren Buffett looks at the fundamentals. He buys a stock and holds on to it. Someone who does day trading is looking at graphs and doing technical analysis, with lots of numbers. (And 'quants' are the math and computer geeks who figure out how to buy and sell securities in tenths of seconds.)

    ---

    My point is that if you see a stock broker on TV and he says he's a "fundamentalist," he probably means he's a "fundamental analyst" (a rather good thing) rather than a "market fundamentalist" (an evil Republican thing). Or he could be both.

    I'm just saying the one word has two meanings. (Plus, the religious meaning, but that's mostly irrelevant if you're talking about economics.)

    "Where it is a duty to worship the sun it is pretty sure to be a crime to examine the laws of heat." - John, Viscount Morley

    by Dbug on Tue Sep 21, 2010 at 08:49:26 AM PDT

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