The Free Market and Unreality

[T]he characters who appear on the economic theater-stage [die oekonomischen Charaktermasken] are merely personifications of economic relationships; it is as these mask-bearers [Traeger] of economic relationship that they come into contact with each other.
– Karl Marx, Capital, my translation

This weekend I posted a few emotional lines from Wendell Berry’s poem “Some Further Words” with no explanation.  While it is no secret that I trust Berry’s intuition and analysis, I wasn’t totally surprised when a couple of my favorite Xangans (not to mention my favorite usernames on Xanga; who couldn’t adore Darth Patriot?  What better name for an objectivist?) voiced their dissent.  The conversation quickly moved to one of my most strident objections to the enthusiastic embrace of free market ideology (at least from Christian quarters; others will have to address the issue seperately).

The free market obscures reality, and creates commonly agreed upon fantasies and fictions.  I have written before about the unfreedom created by free market ideology, as well as the detachment it breeds between consumers and producers, as well as potential resources for Christians to draw on in navigating such “free” markets.  Now I want to extend my critique of free-market ideology specifically to the point Marx makes in the above quotation: how the market functions to obscure rather than illuminate the true relationships between people and objects.

In his work, Imagined Communities: Reflections on the Origin and Spread of Nationalism, Benedict Anderson puts the phrase to one of my deepest discomforts with the free-market ideology.  It creates “imaginary communities,” communities which only relate through the medium of commonly-held fictions, even if the fictions are oftentimes harmless in themselves.  An example of commonly-held fiction at this level is our banking system, where we all agree to pretend that banks actually possess the money we keep there.  In reality, a sharp percentage of that money is tied up in non-liquifiable investments elsewhere, while the equivalent of our investiture is “insured” by a federal agency (up to a certain reasonable amount).  A more troubling example is the fiction that the debt of Americans could in theory be repaid.  In reality, there is not enough wealth to cover the debt plus the interest owed, because that wealth has to come from something tangible.*

For Marx, currency itself is another of these fictions, as “value… transforms every product of labor into a social heiroglyph” – that is, a dollar sign and an attached numeral.  The true worth of a thing is obscured by the dollar amount the market will bear to see assigned to it.  For example, my local Wal-Mart sells bananas for $0.29/lb on Tuesdays.  In what sense are those bananas “worth” a mere $0.29/lb?  This number (which is of course arrived at by a dizzying number of cost/benefit analyses) serves to obscure rather than illuminate what those bananas actually cost.  To get at the reality behind this free-market illusion, we need to be trained to ask certain questions.  Brian Walsh and Sylvia Keesmaat suggest a few.

What is the social implication of cash crops in the Third World? What does switching to cash crops for export do to those communities? What are the ecological costs of the chemically intensive and single-crop practices of the agribusiness sector? To whom are really paying the [29] cents a pound for our bananas? How much is the farmer getting? How much goes to the wholesaler and the retailer?  Shopping at the large chain supermarkets will never allow you to get enough control over your food consumption to be able to get free of the empire.

So this is also a freedom issue, but equally an issue of obscurity.  How the hell do we grow bananas year-round, ship them across the world, store them and then sell them all for $0.29/lb?  What could possibly be going on here but either a miracle or a mirage?

For a further example, let’s stick with food, but instead of following the dollar signs, we will follow the nutrients.  Michael Pollan, author of The Omnivore’s Dilemma, will be our guide here.

As any farmer will attest, there is no money to be made selling whole foods.  Anything to be sold in the fruit/vegetable section or in bins will invariably bleed you dry.  So corporations do not generally attempt to market whole foods.  Instead, they take whole foods, complicate them somehow, attach an image, and sell that.  Whereas you might get $0.79/lb for oats, you can instead take those 79 cents worth of oats, combine them with some emulsifiers, some preservatives, some sugar and some food coloring, shape them into little circles, attach a clever name like Cheerios or Apple Jacks, add a marketable, child-friendly mascot, and sell them for three or four times as much.  Profit!

The rabbit hole goes deeper.  The chain stores can capitalize on the marketing of General Mills, and create cheaper knock-off versions of Cheerios, with their own (slightly more gaudy) clever names and mascots.  So General Mills takes it a step further and creates Cheerios cereal bars (held together by an edible, milk-like substance) and then Cheerios cereal straws (which feature the same milk-like substance), both of which appeal to children (as they’re really just candy) while still advertising their whole-grain goodness to parents.  Now we’re making closer to ten or fifteen times what we would from selling the raw product, because we’ve learned about marketing and brand creation.

But the questions remain.  What are we paying for when we buy Cheerios cereal bars to eat on our lunch breaks (Surely they’re better for us than fast food; they’ve got whole grains!), or cereal straws to encourage our kids to drink more milk?  In Michael Pollan’s analysis (focused on the illusions of nutritionism as opposed to the free market generally, but they’re invariably interconnected), we’re paying for the illusion of healthy food, without giving up our frenetic, fast-paced, fast-food lifestyles.

If you don’t believe that the market itself functions to create this illusion, consider the development of FDA advice statements.  When they began to advise Americans generally on what to eat, they used plain and understandable language, and told us what to avoid.  “To reduce the risk of heart disease, eat less red meat,” is the famous controversial example.  It’s plain, realistic, understandable, and for those reasons completely anathema to the free market.  The food industry went wild when the government said to eat less red meat.  They lobbied and threatened and vilified until the FDA released a revised statement.

“To reduce the risk of heart disease, the consumer should seek to eat more lean meats, low in polysaturated fats.”

Needless to say, the industry was much happier with this bit of advice.  First, it didn’t tell anyone to eat less of anything, but to eat more of something.  But even better, it abandoned the straightforward and understandable language of food for the specialist-oriented and obscurantist language of nutrition.  The food industry has a hard time manipulating food: red meat remains red no matter what chemicals you add to it; but anything can be modified nutritionally, which is why factory farms all over the United States (mostly owned by a handful of  major corporations, of course) now feed their chickens flax seed, so eggs can be marketed as being “rich in Omega-3 fatty acids.”

Likewise, the industry pressured the FDA to revise its food safety guidelines to change the term “potentially hazardous foods,” which formerly described potentially hazardous foods, to “TCS foods,” which stands for “Time-Temperature Control for Safety.”

But the point is clear.  The purveyors of the market successfully pressured the government to obscure simple facts.  They really had no choice; the market doesn’t suffer sentimentality easily.

I could not possibly exhaust the ways in which the free market obscures reality and attempts to replace it with profitable fantasies.  For more thorough analyses, see Naomi Klein’s No Logo, and Wendell Berry’s insightful essay, “The Total Economy.”  It is enough to simply point out the absurdity that in a free-market economy, corporations are defined as persons with full, God-given rights.  I follow Berry in saying without apology that

A corporation, essentially, is a pile of money to which a number of persons have sold their moral allegiance.  Unlike a person, a corporation does not age.  It does not arrive, as most persons finally do, at a realization of the shortness and smallness of human lives; it does not come to see the future as the lifetime of the children and grandchildren of anybody in particular. It can experience no personal hope or remorse, no change of heart. It cannot humble itsel.f It goes about its business as if it were immortal, with the single purpose of becoming a bigger pile of money. The stockholders essentially are usurers, people who “let their money work for them,” expecting high pay in return for causing others to work for low pay.

I hasten to add, of course, that stockholders (or CEOs, for that matter) are not necessarily bad people.  But they are very seriously implicated in a bad economy.

What do you think?  Does free-market ideology necessarily obscure reality?  Does it ever serve the opposite function and illuminate what would otherwise be dark?  What resources can Christians draw on to oppose the illusory effects of market forces?

*For an excellent analysis of this phenomenon and why it is necessarily the case, see Robert Heinlein’s example in For Us, The Living, pp. 209-231.  His answer is that the government must inject slight amounts of new capital annually to offset the unpayability of the debts.  This may be workable (economists disagree), but is not necessarily less illusory, as it is necessarily fiat currency, not corresponding to any real wealth but to the public’s trust in the government to acknowledge their own valuation of currency.

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