Thinking Points Discussion of Chapter 5: Morality and the Market

I think one of the more difficult concepts to discuss here is the concept of consumer choice versus collective good. There are those which would argue that anyone should be allowed to purchase an SUV, while I would argue that a) SUVs waste fuel, a precious and limited resource, b) pollute more than most cars, and hence are ultimately destructive and should not be an option for car buyers. Many people are unconcerned about where their products are made, and the labor practices involved there.

I think what gets missed in both these cases is that often when consumer choice trumps collective good, it comes back to the consumer in the end-- pollution will eventually tax the consumer's health; poor labor practices elsewhere will drop labor income here and drain labor jobs.

In a nuturant economy, while the individual gives up a little in the short run, in the long run they gain a lot. I think this is something we often forget.

This is true in almost any case--not just the economy. Think about crime prevention and nuturant vs strict father model. We can fund schools, and social programs, or fund cops and billy clubs and prisons. One will ultimately work, and the other will ultimately not.

Again the progressive vision is the sustainable vision.

The opposition of consumer choice against the collective good is a dangerous image. Since we consumers are not rational actors we should not be presented with a set of choices that includes options that lead to unacceptable consequences.

Imagine if a parent assumed that their child was a rational actor and therefore was perfectly capable of making the right choice between playing on the highway and playing in the playground.

Any parent who made this assumption would be criminally negligent. When the government allows the market to offer us choices that are unacceptable, it is criminally negligent in it's duty of protecting us from harm.

I believe the collective good is arrived at through a combination of three factors; the consciousness of the people (how we think about ourselves, others, and the world), the exchanging of Goods between people ot meet our needs, and the structuring of our relationships through institutions of governance. The fundamental job our institutions of governance are to create a set of relationships in which we are acting entirely within a set of choices that are reasonably acceptable. The challenge that we have is that corporations are at least partly private governance institutions, they are constituted by a group of people for economic purposes but they act to govern behavior in the same way that the Government is constituted to govern people's behavior.

The governance of the behavior of the market is the job of the government because individual consumers are not capable of having the necessary effects that would reign in corporate behaviors that endanger people and the commons that we share. Consumer choices are not rational acts that maximize self-interest and the SUV phenomena is a reasonable example of that fact. But there are some people with legitimate need for a large capacity vehicle, therefore the regulation of the market needs to focus not on what kind of particular vehicles each person should be allowed to buy. It should focus on having a set of criteria that each vehicle needs to meet in order to both meet the needs of the consumer and at the same time does not harm the commons.

We have to promote a broader consciousness of this way of thinking about ourselves and our society in order to cause our governing institutions to reflect this concern.

Someone wiser than me once said "The market knows the price of everything and the value of nothing." It's ironic that conservatives who profess to be advocates of absolute morality would let the market be the arbiter of value, since the only value that the market recognizes is economic value. I think the free market is great for economic transactions, but it is totally inappropriate for many things, such as health care. The less an HMO pays in benefits, the more profit it can make. This is simply the logic of the market, whereas the logic of compassionate care is to do whatever one can to help a patient, which from the market's perspective is irrational. That doesn't mean that the market is intrinsically evil, it just means that its logic doesn't apply in all domains. I think the present time is a good time to have a discussion with the American public on the utility of the free market, since the present administration has taken the idea to its extreme. Conservatives seem blind to the reality that there is a level of cooperation that underlies the level of competition. Conservatives tend to idealize "rugged individualism", but according to the history I learned in school people on the frontier were always getting together to help each other in many ways, building barns, schools, roads, etc. Somehow that's been taken for granted for so long that it's now invisible.

One of the problems when discussing the market is that many of its ideas are partially true or they are true in certain sectors. Commodities are normally used as the examples for how the market works.

And there are also those areas where the market runs over policies, such as in the war against drugs. No matter how much we have tried to fight drug traffic, the market makes sure that there is a constant flow of drugs. Or there is illegal immigration. The economic forces working in both Mexico and in the United States keep the flow moving.

At the same time, there are many ways of manipulating the market, which free-market supporters tend to ignore.

Working around this concept is especially hard in the US. I am open to hear any ideas on this issue.

P.S. This is off topic. Why did the email reminders stop? It was through them that I made a point of coming back to discuss things here. I am juggling many things, and the reminder bring me here :)

Before I logged on just now I was thinking of the inconsistency of prohibiting the sale of some substances on the open market, such as marijuana. Talk about regulation! There is a great deal of hypocrisy in the free market, as the same people who preach the free market doctrine think nothing of using government to stifle their competition. This raises the question: do they really believe in the principle but suffer from private moral shortcomings, or do they actually believe that the market should be regulated in a way that fits their self-interest but use the language of free markets as a smokescreen? Somehow the elite always seem to have their own set of rules, so I'm skeptical that any of the free marketers really live according to their principles, unless the principle is "get it while you can". I think that at this time people are receptive to that message because of the spectacular failures like Enron and the energy crisis in California and the graft and corruption in the Bush administration.

Speaking of markets, I'd like to get a clearer definition of the term "market" as we're using it. Strictly speaking, a market is just a place where willing buyers and sellers come together to do business. However, we seem to be discussing it in a much broader sense that encompasses the whole economy as well as the legal framework pertaining to it, since we're talking about things like regulation, etc.

Joe, yes this helps. I wandered away from the discussion for a few days. What I like to do in these discussions is to see if I can figure out what assumptions someone is making in their arguments, whether they come from the NP or SF side, because I believe that all arguments rest on certain assumptions, such as one's assumptions about human nature. At any rate, as I read your reply it occurred to me that the conservative model of the market rests on an uncharacteristic assumption for conservatives, which is that people are basically good. In the ideal free market model everyone acts solely in their own self-interest and competes solely on the basis of price and quality. That is, one succeeds by providing the marketplace with a better product at a lower price. Nowhere in the model, as far as I can tell, is there any allowance for the possibility that people will use negative tactics against their competitors, such as sabotage or insider gaming of the system, that might not be illegal in other contexts, but that have nothing to do with making their products better and cheaper. For example, stealing another company's secrets or mudering their CEO are wrong because it's wrong to steal or murder in any situation, but what about other tactics that could be used to squeeze a competitor? Where is the line between fair and unfair competition?

Perhaps a good way to say it is to say that every machine needs a regulator. If your car didn't have a gas pedal to regulate the amount of gasoline going to the engine, then the engine would rotate faster and faster until it blew itself up. If a free market didn't have a regulator then it would quickly cease to be a free market because the strongest participants would take everything for themselves out of their rational self-interest. Sometimes you can have too much of a good thing.

Hi Joe,

The topic of markets is also one of my key issues in the current political climate, and I'd like to offer some terms that I like to use when referring to conservatives. Some of these are already popular at Rockridge and Longview, like "market fundamentalists" but I like to use the word "wild" in this context, because while bad regulation should be removed, of course not all regulation should be removed because not all of it is bad. Thus I refer to "wild deregulation" and "wild market fundamentalists" to get the point across that these people are in fact recommending policies that are profoundly irresponsible.

This is intended to activate the NP frame's sense of responsibility, and to convey the impression that deregulation should be feared.

I also like to call myself a "fair-market capitalist" to attach a sense of social equity to the genuine benefits that can result from a market that is regulated to protect competitive dynamics. That is, when you can maximize the structural competitiveness of a market, then it does tend to yield better social results.

I also like to identify an inherent ambiguity in the word "free" as applied to markets. The common conservative usage is "unregulated" but I prefer to interpret it as "fluidly flowing" (i.e., low barriers to entry, not dominated by market power, etc.

structurally competitive). So I want to reclaim "free market" to mean "fluid market" as protected by thoughtful regulation for maximum competition. I try to make the case that the wild deregulationist interpretation is a perversion of the true underlying meaning of the term "free market". (Even if Adam Smith assumed that lack of regulation would lead to competition, the real goal is competition, while deregulation is at best a tool. And that tool only works when there is nefarious regulation as the starting point, such as, say, the feudal monarchy economy that preceded the industrial/corporate economy. The context can make a big difference.)

Finally, markets fail not only because of market power and information asymmetry, but also because of external effects and public goods: there are some societal benefits that markets structurally cannot reach ever. You mention this when you discuss social costs such as pollution, but some wild deregulationists may try to counter with the argument that anything can have property rights assigned to it and thus it can enter the market, but that is certainly not the case for public goods, and it may not be the case for many externalities either.

(And, when an interesting hybrid such as cap-and-trade markets for air or water pollution is proposed, their purist tendencies lead them to reject even these market-dynamic solution, simply because the "cap" part constrains the market at all.)

All this said, government is (as someone I admire calls it) a "sausage factory" in terms of the political process -- it's scary sometimes to see what goes into legislation and regulation, because of the way political dynamics distort what is supposed to be a process of searching for the common good. And so, the deregulationist position can often find support in the way that regulation can come out badly formulated or badly implemented (or both), because of an artificial process of political compromise. And, the incidence of "industry capture" in this process is prevalent enough to serve as a warning. All of this provides fodder for libertarian ideology of reducing government.

This needs to be pushed back against, by understanding that bad regulation needs to be fixed, not necessarily abandoned (abandoning bad regulation can still lead to worse results).

The never-ending issue with government (and "governance" in general) is accountability. Small-government dogmatists are pessimistic about increasing accountability, but progressives are more optimistic. Nevertheless, I think progressives would do well to be careful about supporting regulation blindly, because it can be screwed up so badly. We still need to push back against bad regulation by calling for its improvement, and insisting on it without pause.

There are no silver bullets in this endeavor (I just came out of a new MPP degree last spring, and am appropriately humbled by the difficulty of good governance and the still-nascent stage of so-called "policy science" at this point in history), but the road to progress is through tools of transparency and citizen voice that can enhance accountability of our representatives.

And, in this Internet era, I think we have potentially the best chance in history to take some big steps forward in this regard, toward what I also like to call "wiki-governance" (I haven't really defined that term, but you probably have a good connotation of it from its derivation from "wikipedia"). But we've only taken baby steps in that direction as of yet, and there is a lot of mountain still ahead of us to climb.

So anyway, I hope some of my thoughts here might be helpful to you and other participants in the blog. And if you or anyone else have suggestions for fine-tuning any of this please let me know, because it is all a work in progress. Pun intended. :-)

With my expertise in Human Development and Family Relations, I see many flaws in the family values framework laid forth by conservatives that have gone unidentified by those of us on the left. My summary here is cryptic; however, I'm in the midst of writing a book that debunks right-wing family values rhetoric in a comprehensive, cohesive way that will bring these points (and others) to life.

A few key points:

1) A sound and healthy family does not involve an authoritarian, rigidly or even traditionally defined family structure, rather is a democratically organized, authoritative system that is open and adaptive. A critical feature of a healthy family (and any open system) is its ability to evolve in order to meet the needs of its members while adapting to the greater context in which its embedded (I know, I know, evolution is a dirty word.)

2) There is a key distinction in child development literature between punishment and discipline. Punishment is the use of power over another (from the greek word disciple, to guide). The strict father paradigm wrongfully uses these two concepts interchangeably, sugar-coating authoritarian, punishing impulses in the name of discipline and guidance. It ain't one and the same. No how, no way. And its time to call them on it. Bullies don't lead by way of example. They use force and/or abuse their position of power, hardly a hallmark of the enlightened.

3) Self-discipline must be cultivated from the inside-out, involving "whole-brain" functioning which in common parlance may be referred to as Emotional Intelligence and in the world of brain neuroscience, optimal integration of the prefrontal cortex. This is the area of the brain that makes us uniquely human, providing us with the capacity for impulse control, sound judgment, empathy and compassion--in short the makings of morality. What brings about optimal prefrontal development??? According to brain neuroscience research something known as empathic attunement--the good 'ol nurturant parent model favored by us progressives, not a whack over the head with a Bible nor a well-worn rod used against an otherwise spoiled child.

4) "Progressives recognize greater complexity and conservatives only recognize direct causation" or what I think is more accurately called black/white thinking. The classic model of moral development still embraced today put forth by Lawrence Kohlberg from Harvard thirty plus years ago, suggests that as human beings mature, they move away from simplistic black/white model of morality towards one that is capable of abstract thinking as cognitive structures develop (i.e. the ability to process emotions and take another's point of view.) The moral high-ground of the extreme right-wing is equivalent to the normal development of a seven year old whose sense of right and wrong is punishment/reward dependent, befitting of a youngster sitting on Santa's lap swearing off naughtiness for personal gain. That of progressives involves often going against conventional notions of right and wrong, and taking strong stands that may not involve personal gain.

Hi All,

I've been busy this week and haven't been able to contribute here, so my comments are coming late, but, this is something I've done quite a bit of research into.

There is a common assumption - to which Joe refers - that a "free market" equally benefits anyone who takes part in it. In fact, that is both demonstrably untrue and inconsistent with economic theory. In order to explain this, though, I should take a moment to explain "risk:reward analysis," which is an application of probability and game theories.

HYPOTHETICAL: Let's say I offer you a dice game. I ask you to guess the next roll of a six-sided die. You must pay $1 to play, for each roll. If you guess right, I will pay you $7. Assuming it is a fair die and a fair roll, this is a profitable game for you to play. Why?

Let's assume we play 60 times. On average, of those 60 plays, you will win 10 times, because the probability of you guessing correctly on any roll is 1-in-6. You'll have spent $60 for those 60 guesses. The 10 correct guesses will have won you $70. So, you will have profited $10 over 60 plays. In terms of mathematics, your "expected value" (EV) is about +0.167 (almost 17 cents profit) per play.

But that is a theoretical EV ... a statistical probability. You WOULD NOT expect to profit exactly $1 for every six plays of this game. You might guess wrong 50 or more times in succession, or only get two correct guesses in 100 or 200 plays, just because of the random element. In order to get a reliable profit, you need to play hundreds or thousands of times, to take advantage of the "law of averages" (or more precisely, what mathematicians call "regression toward the mean").

So while the theoretical EV is the same for any given player, the actual EV will differ from one player to the next. Specifically, it varies according to HOW MANY CONSECUTIVE GAMES THAT PLAYER CAN AFFORD TO LOSE.

If you have $300 to play with, it's extremely unlikely that you would "go bust" before the "law of averages" turns in your favor. But if you have only $3 to play with, there is almost a 50% probability that you would lose your first three games and "go bust," and your net "risk of ruin" is closer to 60%.

The application to economics is or ought to be obvious. Economic actors with large "bankrolls" - large corporations and wealthy individuals - can afford enough losses to "keep playing the odds" until the "law of averages" turns theoretical EV into real profits, while economic actors with small "bankrolls" cannot play at the same odds. Instead, small-bankroll actors must choose strategies which, while less risky, are also far less profitable.

A larger bankroll allows you to take narrower (but still profitable) risks. That in turn means you can profit from opportunities that a small-bankroll actor could not, because the small-bankroll actor can't afford the risk-of-ruin. A large-bankroll actor can gain thus a higher profit-per-dollar than a small-bankroll actor, who must limit himself to lower-risk, lower-profit enterprises.

This is true, EVEN IF EVERY ACTOR HAS THE SAME INFORMATION AND THE SAME SKILL IN MAKING RISK:REWARD ANALYSES.

In fact, economic actors don't have the same information, nor access to the same analytical skills. Even discounting "insider information," a wealthy actor can access information which is unknown to the average individual, because the wealthy actor can pay people to research it. A wealthy actor can also hire mathematical experts to assess that information in ways that the average individual can't (and can't afford to hire out).

What all of that means, in practical terms, is that if government takes no action to offset these systemic advantages - what conservatives refer to as a "level playing field" - WEALTH WILL INEVITABLY AGGREGATE IN THE HANDS OF WEALTHY. And that is true even if the wealthy aren't "cheating" (which many are not). It's simply a function of large corporations and wealthy individuals being able to absorb more losses and thereby benefit from the "law of averages," using information, skills, and bankroll resources which are not available to the average individual.

This is the fundamental MORAL argument in favor of progressive taxation and other such system-balancing policies. It's not God-ordained that "the rich get richer." It's simple mathematics. In order to prevent it, government has to TRULY "level the playing field," using policies that shift some of that additional per-dollar profit back into the hands of those who lack the resources to take advantage of the "law of averages."

Crissie

Crissie,

You make some really great comments here that point to a basic, general truth about markets: a level playing field is not only about "equal opportunity" in terms of structure but also in terms of initial allocation. And thus, if the initial distribution of resources is inequitable, even a perfect market will not correct that. (And so if real world market dynamics lead systematically to inequitable resource distribution, the whole thing spirals increasingly out of balance.)

If I may elaborate a bit further:

In technical terms, economists talk about "market efficiency" in terms of "potentially Pareto optimal" outcomes to market transactions. What this means in lay terms (for the lay audience reading here) is that ideally every market transaction would benefit all players or least no one would be worse off and some would be better off. That creates a net benefit for society in aggregate, which is good.

In real life, there are some losers, and not just winners and neutrals, but the argument for policies that have this result is that "in principle, the winners could compensate the losers and still come out ahead." If that really happened that would be nice, but conservatives would argue against "redistribution of wealth" to accomplish that, which is one of their inherent contradictory stances with regard to public policy.

But even if true "Pareto optimal" markets could exist in the real world, they would still not necessarily be equitable if the initial allocations going into the market are not equitable in the first place.

Again, there is a technical exercise popular among economists to illustrate the potentials for "Pareto optimal" results of transactions between two market players called the "Edgeworth Box" which shows the set of optimal "win-win" transactional results depending on initial allocations of two goods between two players. There are essentially an infinite number of possible outcomes that are "optimal" from a market "efficiency" point of view, but none of them alter inequity in the initial distribution of resources.

Bottom line:

A perfectly competitive "fair" market will not compensate for inequity in the initial allocation of resources in society, any more than it will address issues of common goods such as a healthy environment and general security and safety.

All of these issues must be dealt with outside of markets, because markets simply do not have the power to reach there on their own internal power.

This is why resources that are external to markets must be used to address these issues, and why public government cannot be replaced with pure private markets (aside from the point that markets are creatures of regulation in the first place).

The simple fact is that there will be policy made in these areas, if only by default and inaction. Markets will not address these needs, and so market-external "governance" of one type or another will inevitably fill the gap.

If we don't create democratically accountable government to do this, then unaccountable government, or private forms of governance affecting the general public will step in. The key to an equitable society is to make sure that such governance is as broadly accountable as possible.

Markets are thus incapable of providing a "level playing field" all by themselves, even in the ideal case that can never occur in the real world. So we need to push back against this idea from the wild market fundamentalists that maximal deregulation somehow equates to a level playing field.

Of course it doesn't. It couldn't.

An equitable society must include methods of equitable redistribution of wealth following inequitable distributions resulting from market dynamics.

(Bonus Topic: I won't get deeply into the concept of alternative currencies here, but the simple existence of interest-bearing currency is an issue here, in the systematic concentration of wealth. It was outlawed for a long time (many societies used to call interest-bearing loans "usury"), but broke through in recent centuries in order to power the industrial revolution, along with the limited liability and status of "legal personhood" that was granted to corporations. There is a reason that IRS calls interest-derived income "unearned income"... I recommend the work of Bernard Lietaer here, especially his book The Future of Money. There are a lot of ways that the rich get richer in the current system, once they pass the threshold of initial "richness". When it gets automatic and essentially effortless, then structural inequity is a direct and inevitable result. Not only that, but the "time value of money" resulting from interest leads to systematically "discounting the future" in both private and public policy decisions, which is a serious problem in terms of how economic markets interact with the environment.)

Hi Dan,

Thanks for the excellent explanation of the Pareto Optimal and the Edgeworth Box Problem. Pareto-based analysis is a very common tool used by economists to assess market efficiency. And as you correctly noted, it has a glaring analytical flaw: it subsumes individual experiences into aggregated data - assuming "a rising tide lifts all boats." Pareto-based analysis is pretty good at predicting the tide, but it has little or no utility in predicting the seaworthiness of individual boats.

Risk-based analysis, which accepts that some risks will fail, is I think a better frame for the morality of economic models. It both allows us to examine aggregate data - regional or national wealth as a function of risk-taking - and also to look at how that is likely to play out in individuals' experiences. It also gives us a different window, one that can show how economic policy is affected by other policy choices, often in ways that can make one economic model SEEM far more efficient than it really is.

For example, it's taken as a given that the "free market" economic model is superior to all other models. The "proof" of this is, we're told, the collapse of the Soviet Union as compared to the phenomenal economic growth of the U.S., Europe, and Japan during the Cold War. Quod ero demonstratum. End of discussion.

A risk-based analysis of that historical data yields a quite different conclusion, however. For much of that period, the U.S. was the most "free" of the "free market" economies. As it happens, the U.S. also saw the smallest real economic growth over that period, and what growth we did have was largely due to "odds fixing" (more on that below).

The Japanese and European economies were not (and are not) "free markets" in the sense espoused by U.S. economic conservatives. Both relied and still rely on large, govermnent-recognized and -regulated business consortiums which "marry" high-, low-, non-profit ventures. By non-profit, I mean ventures whose returns are too long-term or too speculative to be attributable in present market value, such as: education, research and development, infrastructure maintenance and improvement, environmental and/or cultural preservation, etc.

Foreign and domestic investors were encouraged (often required!) to buy into a consortium AS A WHOLE, rather than its component ventures. And these consortiums were not entirely "marriages of choice." While the consortiums competed for high-profit ventures, their low- and non-profit ventures were and are often assigned by the government. Each consortium's high-profit ventures subsidized its low- and non-profit ventures, and the government protected (and still protects) domestic market profitability of vital enterprises through restrictive tarriffs.

This arrangement - coupled with comparatively low defense spending - enabled the European and Japanese economies to flourish during the Cold War. But conservative economist either ignore the extensive government involvements in these economies, or argue that the U.S. has grown faster (at least since 1975) and that Europe and Japan could have grown even more had they adopted the "purely" free-market U.S. model.

In this argument, the phenomenal growth in Europe and Japan from 1950-1975 was simply a function of redeveloping potential that had been devastated by WWII, and once that potential had been redeveloped, both the European and Japanese economies slowed to a crawl, "hampered" by "quasi-socialist meddling."

In fact, since 1975, PER-CAPITA economic growth in Europe, Japan, and the U.S. has been almost identical at roughly 1.4% annually. While overall U.S. GDP growth has averaged about 3.2% per annum since 1975, most of that is due to population growth, and most of that population growth is due to ... immigration. In short, take away the "flood of foreigners" over the past 30 years, and the U.S. would have seen the same, "sluggish" economic growth experienced in Europe and Japan in that period.

But a deeper analysis shows it's even worse for the U.S. economy. The "mandated market consortium model" of Europe and Japan has yielded more domestic GDP growth - increased domestic production of goods and services - than the "free market model" in the U.S. How can this "economic heresy" be true?

The answer, from a risk-based model, lies in an "odds fixing" U.S. foreign policy, which has made foreign production more profitable than domestic production for U.S. corporations. The explanation is extremely complex, so I'm going to oversimplify, and please forgive the oversimplifications:

Domestic production and marketing, in a mature industrial economy, is generally a low-risk-low-profit venture. The risk is low because domestic conditions are fairly stable: investors know what the government will be, what laws will apply, etc. The profit is low because the market is usually saturated (new businesses are competing for market share rather than opening new markets) and labor is more expensive.

Obviously, the converse applies for foreign production and marketing, in immature or non-industrial economies. These enterprises are high risk, as local conditions may be very unstable: governments may be overthrown, reformers may radically rewrite the local laws or even nationalize resources, etc. But when they do succeed, these are also high-profit enterprises, as the local market is not saturated and local labor is inexpensive.

Now, if a U.S. corporation decides to invest in a high-profit-high-risk foreign enterprise - and if the corporation itself assumes the risk of that enterprise - that's a "fair" investment relative to domestic enterprises. Yes, the corporation is getting a much higher return on its foreign investment dollar, but it's also taking a much higher risk. When risk-of-ruin factors are taken into account, the foreign investment is not SO much more lucrative as to render domestic investment unattractive.

But that balance shifts - dramatically - when the U.S. government engages in "odds fixing" foreign policies. Since WWII, this has been the principal motive for U.S. foreign policy. "Anti-communism," for example, had less to do with human rights or combatting totalitarian regimes - we propped up scores of abusive, totalitarian, but COOPERATIVE regimes - than with ensuring U.S. corporate access to overseas markets and resources. The CIA and the U.S. military were risk-management tools, deployed to overthrow or threaten with overthrow governments whose policies might undermine the profitability of U.S. corporate foreign investments.

Thus, rather than foreign investment being high-profit-high-risk, our "odds fixing" foreign policy made it high-profit-LOW-risk. That has made foreign investment MUCH more attractive than low-profit-low-risk domestic investment. The "U.S. economy" has grown, but most of that "growth" has been profit on work being done - goods and services being produced - OUTSIDE the U.S., made profitable by the "risk-squashing" U.S. military and CIA ... often by enmiserating foreign peoples, almost always paid for in blood, and undercutting investment in our own people and institutions.

Seen through this "Risk:Reward" frame, the moral and practical failures of the U.S. "free market model" are glaringly apparent. Our economic "triumph" is revealed as a sham. The "mandated market consortium model" of Japan and Europe has produced more real domestic GDP growth - more goods and services made by and more investment in the peoples of Japan and Europe - while our "free market model" has largely been profit-taking from overseas investments, where the risk-of-ruin was born by the U.S. military. Meanwhile, within the U.S., the "free market model" inevitably leads to wealth aggregating in the hands of the wealthy.

This is not a prescription for long-term economic stability. It's a prescription for bankruptcy, a domestic economy so hollow and unstable that its collapse is all but certain, a collapse which could quite likely mean the end of our constitutional republic and the freedoms and traditions on which our nation was founded.

We will reap what we have sown.

Crissie

To sustain the conservative frame of reference that obsesses with the ideal of market forces as all-wise, a lot must be kept hidden from view.

I recently encoutered an example. I went to an ER in rural Arizona for what I thought was a bout with an extra virulent sort of flu. Turned out I had a high glucose count which was really Diabetes. So they called in an air ambulance crew for transfer to a hospital 164 miles away. It was a half hour flight.

A few months later I get a bill from the air ambulance service: $28,620.00
Yes, that is over twenty eight grand.

In querying this, I found that there is a whole hidden paradigm. This is not a market economy. Insurance companies negotiate these prices and so far, trying to find out who makes the decisions about supporting these costs and why, has proved very difficult. It does seem that the insurance carrier involved negotiated the price down - but only to $20,000.00

Health Care as a category is very intertwined with a market functioning in the shadows, outside of the average person's knowledge and beyond all but the most determined efforts to learn anything about it.

The idea that there is free enterprise at work here can only be sustained by a virtual blackout of real information, and a collusion that occurs through a variety of factors. Doctors won't talk about this generally, because they have to function in their work and to do that, it is best to close their eyes to the aspects they are just as horrified by as everyone else. Patients don't want to deal with it because they are too busy worrying about their health. If insurance companies will pay the cots, they don't have to understand it. The media won't look into this because it is just too difficult. Politicians generally avoid this because there is not enough payback for the trouble that might come from dealing with the lobbyists who fan the flames of hysteria about messing with free enterprise. They keep up a pretty effective smoke screen cover.

So, essentially this boils down to an abstract ideal about what is really in the public interest versus very tangible prospects for making lots of money.

Political progressivism tends to be in this dilemma a lot. Working for wise environmental policies means working against financial interests shared by big time developers- which few people like- and the average realtor as well.
It works when some of the local interests see progressive policies in terms of supporting quality of life and therefore, small scale financial gain.

Here, lives are at stake and people are in a high state of anxiety which makes it hard to think "above one's pay grade" as it were. The "Free Market" can be invoked because "there is no there, there."

So a progressive framing problem is to cut into the smokescreen covering this whole area, by revealing that this is not in fact, a free enterprise system but more like Halliburton/KBR in Iraq and that everyone is being gouged by specific deals that are made behind the facades.

Fortunately, the myth that the health care system has anything to do with free enterprise seems to be wearing thin. An opening for progressive policy change might be possible where it might not have been before.

Most proponents of Adam Smith's invisible hand of the free market based on self-interest have misapprehended his message in Wealth of Nations. He only meant to assert that such a market was not necessarily bad, not that it was essentially good or efficient. What is equally disturbing is the boosters' general disregard for Smith's criteria of supporting domestic industry or "home bias" as being essential for such a market. Finally, Smith cautions against a too severe a division of labor as stupefying and encourages government intervention to prevent such excess.

So to me, it seems that many have been raised on a (deliberately?) misapprehended market metaphor. This leads me to wonder if it is fruitful to use the words of Adam Smith himself to redefine the idealized free market more in line with (his) progressive inclinations?