Longview's project on Market Fundamentalism is intended as a resource to explain what Market Fundamentalism is, examine its impact on politics and policy, and provide powerful critiques of its key arguments. We plan to keep expanding and developing this resource over time.
Market Fundamentalism is the exaggerated faith that when markets are left to operate on their own, they can solve all economic and social problems. Market Fundamentalism has dominated public policy debates in the United States since the 1980's, serving to justify huge Federal tax cuts, dramatic reductions in government regulatory activity, and continued efforts to downsize the government’s civilian programs. While Republicans and conservatives have embraced Market Fundamentalist ideas, many Democrats and liberals have also accepted much of this mistaken belief system.
Why is it so important to identify and challenge Market Fundamentalist ideas?
Market Fundamentalism is a huge barrier to progressive change in the United States. Its ideas have been used to discredit taxes, regulation of business, and good quality public services. We cannot solve any of our most pressing problems—from global climate change to our dysfunctional health care system to our flawed foreign policies—as long as Market Fundamentalism restricts our policy choices.
Over the last twenty years, progressives have usually avoided directly taking on Market Fundamentalism because it has persuaded so many people. For example, in mounting campaigns for a living wage or to increase the statewide minimum wage, progressives have made powerful moral arguments without addressing directly the question of whether markets do an adequate job of setting wage levels. The hope is that winning a concrete reform would gradually erode the public’s support for Market Fundamentalist ideas. But bad ideas don’t simply go away; they have to be challenged and defeated.
Chipping away at Market Fundamentalist policies is important, but to win lasting victories, we need to change the way that people think about the economy. It is important that people see the economy not as an impersonal mechanism that churns out efficient outcomes, but as a set of institutions that can be shaped to serve our needs. Unless we can change the basic assumptions that lead many people to be hostile to taxation or doubt the ability of government to provide quality services, then our political options will remain very restricted.
Market Fundamentalism is now particularly vulnerable to challenge. For more than twenty-five years, its proponents have argued that lower taxes, less regulation, and fewer government services would make us all more prosperous. Even the White House’s own web page shows us that Apple’s Ipod relies on technologies that were developed through the Federal Government’s initiatives. The President constantly repeats that individuals will always spend money more wisely than government, but the reality is that public spending has been indispensable to our economy’s development.
Myths of Market Fundamentalism
We will gradually add both additional myths and arguments against each of the myths:
- Government will always spend money less productively than private citizens; this is why tax cuts are almost always a good idea.
- Regulation of business is wasteful, unproductive and usually unnecessary.
- Financial markets thrive when regulation is kept to a minimum.
- Private firms will always produce a good or a service more efficiently than the government.
- It is wrong to regulate wages or executive compensation because markets always get prices right.
- Government assistance always ends up hurting the people it is supposed to help.