Market Capitalism and Elite Rule







Market populism is the idea that markets within a capitalist system serve as the best expression of popular will.  Supposidly capitalist markets are democratic institutions that "do what people want."  Markets are not only mediums of distribution and exchange, but mediums of consent that express the will of the people. Elements of this ideaology have been around since almost the dawn of capitalism but was only in the later part of the 20th century that it became dominant in any part of the globe.  Today in the United States this idea is accepted almost unquestioningly by a large percentage of the population and by nearly all politicians and corporate media outlets.  Market populism serves the interests of the capitalist class by obscuring class relations and making it seem that control over the economy is not mainly dominated by a small elite.  In this it is rather similar to electoralism and the idea of a democratic state - it fools the populace into thinking they are in charge when it actually the corporate elite that is in charge.  Market populism is founded on myths about how contemporary capitalism works, is contradicted by empirical evidence and is based on faulty reasoning.

Market populism is premised on the idea that contemporary capitalist economies are based primarily on a free market or something close to it.  This premise is false; modern capitalism is state-capitalism and a far cry from the market-dominated system market populists claim we have.  In the most other contemporary capitalist societies the state tramples on the market in order to protect the interests of major corporations.  The state pours huge amounts of money into the high-tech industry, biotechnology, pharmaceuticals, agribusiness and many other industries.  This includes not only direct subsidies, which in the US totals almost $200 billion annually, but also the development of new technologies by the government.  In the US, for historical reasons, this comes primarily through the military and "defense" spending, what is called "military keynesianism."  When profitable technologies come about as a result of taxpayer funded research it is privatized and the profits go to corporations.  The taxpayers pay for the reasearch, the capitalists make the profits form it.  An example of this is the internet.  It was originally developed by the military, at taxpayer expense, but when it became profitable the corporations took it over and companies like Microsoft were able to make a fortune off it.  In addition other forms of state intervention (besides enforcing private property, without which capitalism could not exist) that distort the market to benefit big business include the Federal Reserve, building & maintaining large-scale transportation infrastructure and bailouts for failing companies.  This system of state handouts for the rich and market discipline for everyone else is called free enterprise.  Market populism is false because it pretends that we live in a real free market economy, we do not.  Markets are subverted whenever they might hurt the interests of the wealthy.

Empirical evidence also refutes the idea that capitalist markets "do what the people want."  The over eight hundred million people who suffer from chronic malnutrition (despite the fact that there is enough food for everyone) certainly do not want to go hungry, nor do most people desire this result.  The majority of Americans believe that there is too much violence in the media, yet there is still lots of violence in the media.  This evidence is not limited to the state-capitalist societies that dominate the world today.  The United States in the late 19th century approximated laisse-faire capitalism yet there were plenty of economic things which the majority did not like - child labor, sweatshops, etc.  Just because "the market" brings about certain things does not mean the majority of the population want those things.

According to market populism, "if an industry or an institution is making a profit, it is satisfying "wants" whose origins and content are deliberately disregarded. But what we want, what we are capable of wanting is relative to the forms of social organization."  Corporations (and governments) can manipulate what people want through advertising and manipulating the enviroment.  "People "want" fast food because they have to hurry back to work, because processed supermarket food doesn't taste much better anyway, because the nuclear family (for the dwindling minority who have even that to go home to) is too small and too stressed to sustain much festivity in cooking and eating -- and so forth. It is only people who can't get what they want who resign themselves to want more of what they can get. Since we cannot be friends and lovers, we wail for more candy." (Bob Black)  

Most arguements in favor of market populism use some variation of the Subjective Theory of Value.  Supposidly prices are determined by the marginal utility to the consumer; prices are determined by "what people want."  Corporations attempt to maximize profit by providing things that people desire and (theoretically) are therefore responsive to public needs.  This idea ignores the large economic inequalities inherent in capitalism.  Corporations attempt to maximize profits by following the money, they therefore tend to be more responsive towards those with the most money.  There's no point in trying to sell things to people who have no money; which is why there aren't any marketing campaigns geared towards the homeless.  Companies tend to gear their production towards those with more money, and in a society where the richest 1% of the population has more wealth than the bottom 90% this means that individuals on the top will have much more influence than those on the bottom.  If capitalism means "one dollar, one vote" as many capitalists claim then it will be those with the most money who will rule.  Corporations and states are also major consumers and these are authoritarian organizations controlled by a tiny elite - giving that elite even more control over the economy.

In addition, the subjective theory of value is based on circular reasoning.  In order to make the evaluations on how best to maximize their utility each consumer must know the prices of goods and also what their income will be.  But this data is dependant on the evaluation made by each consumer.  It is thus circular - decisions of the consumers depend on the prices, prices depend on the decisions of the consumers.

Market populism invents an internally inconsistent fantasy world and then pretends that the real world has some relationship to it other then that of contradiction.  In real life all capitalist systems are based upon the rule of a tiny oligarchy, which dominates and exploits the rest of the population.  It is an authoritarian system in which most people have little say in major decisions.