The Invisible Hand of the Market
Courtesy: Throbgoblins |
Proponents of the "do nothing" approach to real-world problems often claim that there is no solution to the harmful impacts of our fossil fuel economy until "the market" responds to scarcity or high prices. This faulty view suggests that society is powerless to do anything significant in the face of crisis until markets are ready to respond.
In truth, the order of causation is reversed. Markets will only respond adequately to a new crisis after we structure them specifically to do so. "Free" market elites have known this for a long time, despite their rhetoric, as they successfully narrowed the understanding of markets to the creation of wealth – framed in their moral terms as profits for corporations.
We often hear these contrarians talk about markets like the economic system we have now is natural. Otherwise it would be nonsensical to suggest that we can "wait for the market" – as if it had a life of its own. They tell us that we should trust markets to take care of us because they are inherently good.
This notion of markets as a source of morality creates the gap between what contrarians say and what they actually do. Not just any morality is acceptable for markets. They will only accept an authoritarian version.
All of their talk about letting the market be "free" is contradicted by their efforts to modify the market so that it promotes an authority-based morality. Their support of subsidies for oil and coal is a glaring example of this disparity between contrarian rhetoric and political reality. While espousing a view that markets are naturally good, they work hard to create public policies that construct the market in their moral image.
When contrarians seek to narrowly define markets as engines of profit, they brush aside the fact that markets have been designed intentionally to place profit first – ahead of health, well-being, and in the context of the ecological crisis, our very survival. This is especially true in the energy debate where oil and coal are only "competitive" because they are given an unfair (and unnatural) advantage through massive investments of taxpayer money. We pay them through tax breaks that shift public money to private hands and with structural supports like the use of our military to secure transport routes across the ocean – to the tune of more than forty billion dollars every year! (Estimates are tricky – comparisons can be found in this PDF by the International Council on Technology Assessment and a discussion of hidden oil costs from the National Defense Council Foundation can be downloaded here).
Ecologically aware people have a different idea about markets. We want every person to have the support they need to grow and flourish. This requires us to recognize that there are many ways to design a market depending upon the purpose at hand.
We want to create markets to address crises where it is appropriate to do so. In some cases, such as health care, we see that the problem is profit-first markets that generate earnings through the denial of care – see this collection of health care resources to learn more about how it works. Markets are not the solution for problems like this.
It is important to note that governments create markets in the first place. The rules, regulations, and objectives of public policy are what create "playing fields." Whether or not they are fair depends on how we set them up.
What we need are markets with the moral purpose of providing clean energy. This can't be done in a way that lasts if they fail to achieve other purposes too, such as:
- Provide quality jobs that people can count on
- Supply people willing to work with a living wage
- Clean up the environment and make the world safe for our children
- Transition away from dirty fuels
- Promote security and peace so the transition can take place
Wait for the markets to respond to crisis... I don't think so. People must be the ones who respond. And our collective efforts will culminate in policies that create the markets we need.
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