Commentary: Markets became false gods

Special to McClatchy NewspapersNovember 2, 2011 

When the Cold War ended in 1989 and Central Europe and Russia abandoned Socialism, some in America saw that as a vindication for free markets and capitalism as the only legitimate way of economic life.

They saw the popular uprisings against communist rule as caused by a longing to start small businesses, invest in stocks and buy and sell property rather than the longing for freedom of speech, religion and travel.

In fact, these free market disciples deified markets and in the Congress and in their opinionated think tanks proclaimed that business was the new God.

The epic transformation of market economies into market dogma in the early 1990s as the Soviet Bloc dissolved was to greatly affect U.S. economic, social and political events. The all-for-business attitude went so far as to shift U.S. foreign aid programs from providing only education, medicine and advice on agriculture to pressing poor countries to privatize everything from schools to hospitals to clean water.

The fruit of this epic shift to the right has now become clear. The push for deregulation and the deification of financial markets led to extreme abuse, derivatives, collapse of the housing market, unemployment, homelessness, foreclosures and enormous pain.

But wait — this is not all. The epic shift in wealth from the middle class to the wealthiest one percent of the country was accompanied by a vast exodus of jobs from the United States to China, India, Mexico and other poor countries.

The economic wise men of the Chicago School hailed the profits that were made as American workers lost their jobs and American firms collapsed. This was free markets giving us a good dose of reality. Going to work each day for 30 years was simply not good enough. We’d have to reinvent ourselves. As one Republican candidate put it — if you aren’t rich and don’t have a job it’s your own fault.

We would have to pull ourselves up by the bootstraps — if we still had bootstraps.

Truth be known, millions of American jobs could be done just as well by Chinese, Indians, Bangladeshis and Vietnamese for one tenth the cost. Creating an international labor market made it possible to dump the costly workers who had built up America. Consumer goods sailed into U.S. ports and profits began piling up in offshore banks.

Some economists went so far as to say that the country should roll back the social safety nets of the Franklin D. Roosevelt and Lyndon B. Johnson administrations. President George W. Bush, Newt Gingrich and some others sought to privatize social security, ending the thin wall of protection that has kept millions of elderly Americans with shelter, food and health care during their twilight years. Let everyone save on their own, let the stock market wipe out their savings, let the housing price collapse, let them face foreclosure and let the markets sort them out. We’ll all be stronger as a result. Right.

But as in all human and natural events, the pendulum has gone about as far as it could and is beginning to swing back.

Thousands of people camping out in the rain in the Occupy Wall Street movement and sister demonstrations around the world call for an end to the excessive corporate greed. And a majority of Americans seem to agree with them. Finally.

I was appalled this week to learn that the CEO of Gannett newspaper company (which I must admit awarded me a journalism fellowship many years ago and also paid me well for covering South Florida and the Caribbean for some years) was rewarded with a $37 million retirement payoff after he fired 20,000 employees. Even so, investors took a beating; during his tenure shares fell from $75 to $10.

Since 1970, the amount earned by CEOs has gone from 20 times that of an average worker to 400 times as much. This grossly exaggerated inequality reminiscent of the time of Mare Antoinette, can be rolled back through progressive taxation rates.

President Obama may not know how to reverse this obscene situation. And at least one Occupy leader told me Obama failed miserably when he had majorities in both houses by not ending the Bush tax breaks for the wealthy.

But many of us know where some of this needs to begin.

Money has to be squeezed out of elections and politics — probably with a Constitutional amendment limiting spending and contributions in election campaigns — essentially cancelling the Supreme Court rulings that any limit on money is a limit on free speech.

Next, through tariffs, protectionism or subsidies, some American industries need to get a shot in the arm. China’s solar panel factories, for example, get free land, labor unions are banned, pollution can be dumped anywhere and the Chinese currency is undervalued.

Ronald Reagan made a wise decision in the 1980s when cheap Japanese imports by Yamaha and Honda were bankrupting America’s classic Harley Davidson motorcycles. He put an import tariff on big foreign bikes that gave Harley Davidson the time and space to rebuild its aging factories, retool and compete. Today Harleys roam all over America. However in England, where no such protection took place, it is rare to see a Triumph, BSA, Norton or Royal Enfield bike on the road. They never got a chance to improve their reliability and compete with Japanese factories.

Ultimately, America’s culture has to evolve. Winner-take-all has become a fall back for too many figures in our country from sports stars to corporate leaders.

The happiness level of people in Scandinavia is much higher than it is in the United States, report psychologists, because they live in a more egalitarian society where the bottom, middle and top are not so very far from each other that they see the other as enemies.


Ben Barber has written about the developing world since 1980 for Newsday, the London Observer, the Christian Science Monitor,, Foreign Affairs, the Washington Times and USA TODAY. From 2003 to August, 2010, he was senior writer at the U.S. foreign aid agency. His photojournalism book — GROUNDTRUTH: The Third World at Work at play and at war — is to be published in 2011 by He can be reached at

McClatchy Newspapers did not subsidize the writing of this column; the opinions are those of the writer and do not necessarily represent the views of McClatchy Newspapers or its editors.

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