"Capitalism
And Freedom" Unmasked
By Stephen Lendman
04 October, 2007
Countercurrents.org
An
era ended November 16, 2006 when economist Milton Friedman died. A torrent
of eulogies followed. The Wall Street Journal mourned his loss with
the same tribute he credulously used when Ronald Reagan died saying
"few people in human history have contributed more to the achievement
of human freedom." Economist and former Treasury Secretary Lawrence
Summers called him a hero and "The Great Liberator" in a New
York Times op-ed; the UK Financial Times called him "the last of
the great economists;" Terence Corcoran, editor of Canada's National
Post, mourned the "free markets" loss of "their last
lion;" and Business Week magazine noted the "Death of a Giant"
and praised his doctrine that "the best thing government can do
is supply the economy with the money it needs and stand aside."
Rarely had so much praise
been given anyone so undeserving in light of the human wreckage his
legacy left strewn everywhere. He believed government's sole function
is "to protect our freedom both from (outside) enemies....and from
our fellow-citizens." It's to "preserve law and order (as
well as) enforce private contracts, (safeguard private property and)
foster competitive markets." Everything else in public hands is
socialism that for free-wheeling market fundamentalists like Friedman
is blasphemy. He said markets work best unfettered of rules, regulations,
onerous taxes, trade barriers, "entrenched interests" and
human interference, and the best government is practically none at all
as anything it can do private business does better. Democracy and a
government of, by and for the people? Forget it.
He preached public wealth
should be in private hands, accumulation of profits unrestrained, corporate
taxes abolished, and social services curtailed or ended. He believed
"economic freedom is an end to itself....and an indispensable means
toward (achieving) political freedom." He thought state laws requiring
certain occupations be licensed (like doctors) a restriction of freedom.
He opposed foreign aid, subsidies, import quotas and tariffs as well
as drug laws he called a subsidy to organized crime (which it is as
well as to CIA and money laundering international banks earning billions
from it) and added "we have no right to use force....to prevent
(someone) from committing suicide....drinking alcohol or taking drugs,"
while saying nothing about major banks and CIA partnering for profit
with drug lords.
He favored a constitutional
amendment requiring Congress balance the budget because deficits "encourage
political irresponsibility." He claimed taxes were onerous and
was "in favor of cutting (them) under any circumstances and for
any excuse, for any reason, whenever possible...." and make corporations
entirely exempt from them. He opposed the minimum wage, supported a
flat tax favoring the rich, and believed everyone should have to buy
his or her own medical insurance like any other product or service.
Can't afford it? Too bad. Get sick? Let the market heal you.
He opposed public education,
supported school vouchers for privately-run ones, and believed marketplace
competition improves performance even though voucher amounts are inadequate
and mostly go to schools emphasizing religious education or training.
Further, evidence shows teaching quality suffers in for-profit schools
except in elitist ones. Most others stress cost-cutting and fewer services
for bigger returns on investment.
He ignored the fact that
Christian fundamentalist schools harm democracy and violate the constitutional
separation of church and state. They also threaten public education's
future that's been the bedrock of primary and secondary schooling throughout
our history until Friedman first proposed vouchers in the 1980s as one
of his core free choice objectives.
He was a vocal opponent of
trade unions, claimed they were "of little importance (historically
in advancing) worker (rights and gains) in the United States,"
and ignored clear evidence to the contrary in spite of corrupted union
officials who could and should have done more for their rank and file
and still don't. He also claimed "the gains that strong unions
win for their members are primarily at the expense of other workers
(and believing otherwise) is a fundamental source of misunderstanding."
It all came down to supply and demand for him - "the higher the
price of anything, the less....people will....buy."
Sounds reasonable up to the
examples he gave: "Make labor of any kind more expensive and the
number of jobs of that kind will be fewer. Make carpenters more expensive,
and fewer houses....will be built (and the ones that are will) use materials
and methods requiring less carpentry. Raise the wages of airline pilots
(and) there will be fewer jobs for them (because) air travel will (cost
more and) fewer people will fly."
Bottom line for Friedman
- high union wages harm everyone, including union members. They make
consumer products and services more expensive, he believed, notwithstanding
the fundamental law of pricing every marketing executive knows but Friedman
ignored. It's to charge what the market will bear, no more or less so,
costs aside, prices reflect what buyers will pay, no more.
Friedman also opposed government-run
Social Security that he called "The Biggest Ponzi Scheme on Earth"
in an article with that title. He described the current system as "an
unholy combination of two items: a flat-rate tax on earnings up to a
maximum with no exemption and a benefit program that awards subsidies
that have....no relation to need (forgetting it's our most successful
poverty-reducing program) but are based on (criteria like) marital status,
longevity and recent earnings."
He wanted it privatized,
abhorred the "tyranny of the status quo," and agreed with
Barry Goldwater that it be voluntary which, of course, would kill it.
He added it's "hard to justify requiring 100% of the people to
adopt a government-prescribed straitjacket to avoid encouraging a few
(many millions, in fact) 'lower-income individuals to make no provision
for their old age deliberately (even though most cannot), knowing they
would receive the means-tested amount.' " Addressing only eligible
retirees, he ignored millions of others getting Social Security benefits.
They include disabled workers and spouses and children of deceased,
retired or disabled workers. They comprise around 37% of all recipients,
are left out of Friedman's calculation, and would get nothing under
a privatized system.
For Friedman, we're on our
own, "free to choose," but unequally matched against corporate
giants and the privileged with their advantages. The rest of us are
unequally endowed and governed by the principle, "To each according
to what he and the instruments he owns produces," in a savage world
where economic freedom trumps all other kinds. This was right from Friedman's
1962 laissez-faire manifesto, "Capitalism and Freedom," that's
long on free market triumphalism and void on its effects on real people.
He opposed social or any
market-interfering democracy, an egalitarian society, government providing
essential services, workers free from bosses, citizens from dictatorship
and countries from colonialism. Instead, he perversely promoted economic
freedom as a be-all-and-end-all, limited government, and profit-making
as the essence of democracy. He supported unfettered free markets with
political debate confined to minor issues unrelated to the distribution
of goods and services he wanted left to the free-wheeling marketplace.
This was Friedman's best
of all possible worlds with people in it no different than disposable
commodities and government not obligated to fulfill its minimum constitutionally-mandated
function as stated in the Preamble and Article I, Section 8. It's that
"The Congress shall have power to....provide....for (the) general
welfare of the United States" - the so-called welfare clause Friedman
believed conflicted with "capitalism and freedom" and our
"freedom to choose" that ranked above the law of the land
for him.
The School of Thought
in the University of Chicago's Economics Department
Friedman grew up in New York,
got his BA at Rutgers, an MA at the University of Chicago, and his doctorate
at Columbia. Surprisingly, he was a Keynesian early on, but Friedrich
Hayek's teachings changed him into a free market fundamentalist who'd
become what the Economist called "the most influential economist
of the second half of the 20th century (and) possibly all of it."
He returned to the University of Chicago Economics Department in 1946
and became its charismatic leader on a mission to revolutionize his
profession and the world.
The doctrine was simple at
its core - unfettered free market pure capitalism works best, and Friedman
and his colleagues set out to prove it scientifically in a set of mathematical
equations and computer models they developed. They promised that left
on their own, markets are magical. They produce the right amount of
products and services, at the right prices, by the right number of workers
earning the right amount of wages to buy what's produced. In short,
a win-win for everyone....paradise. There was only one problem. It's
voodoo science, sounds good mathematically and doesn't work. Friedman
and his "Chicago Boys, however, believed it did but needed a real
life "Chicago School state" to prove it.
He got many, called them
models of free market magic, and justified repression believing ends
justify means and free choice offered "more room for individual
initiative....a private sphere of life (and a greater) chance (authoritarian
regimes he supported would in the end make it possible) to return to
a democratic society." He countered his critics claiming "economic
freedom is an essential requisite for political freedom" and that
transitional pain was worth it for the free market paradise he promised
would emerge. He and his mentor, Friedrich Hayek, called social democracy,
collectivism, socialism and welfare state economics the "road to
serfdom" producing "bondage and misery" and "coercion
rather than freedom."
It was pure baloney, but
who could argue in the face of huge corporate backing, heavy funding
and the dominant media in tow calling market fundamentalism the new
orthodoxy and repression freedom. On the ground, it was different. The
record of Chicago School fundamentalism is in the human wreckage it
left everywhere.
The Human Toll of
Chicago School Fundamentalism
Every nation Friedman's ideology
touched took pain, but it wasn't the well-off who suffered, just ordinary
working people targeted for profit in pursuit of "economic freedom."
Early on, his dogma was considered quirky, on the margins of mainstream
economics, and out of step with the Keynesian post-war golden age of
capitalism. It lasted until the 1970s when recession, stagflation and
high unemployment changed everything. Keynesian economics was unfairly
blamed, and Friedman got his chance to prove government intervention
is the problem and unfettered free markets the solution. It was pure
nonsense and about as scientific as alchemy, but long ago people thought
that worked until they finally understood they couldn't make gold out
of lesser metals.
The First Test Case
in Chile
Chile under Augusto Pinochet
became Friedman's first test case to prove what we now know is flimflam.
The results were disastrous and Chileans to this day haven't recovered
from the September 11, 1973 coup d'etat and aftermath that ended the
most vibrant democracy in the Americas and ushered in Friedman's magic.
The playbook promised paradise
but delivered the junta's "Caravan of Death," hyperinflation,
the economy contracting 15%, wages cut, unemployment at 20%, labor unionism
destroyed, social services gutted, severe poverty, ghostly factories
and rotting infrastructure, out-of-control corruption and cronyism,
a massive transfer of public resources to private hands, and a repressive
military and secret police targeting dissenters with detention, torture
and death. It was hell for Chileans but nirvana for the privileged and
foreign investors reaping big profits from the masses they took it from.
It was just the beginning with Friedman-style "shock treatment"
on to the next target.
One of many was Bolivia with
predictable results and Friedman unrepentant. Food subsidies were ended,
social services gutted, price controls lifted, wages frozen, oil prices
hiked 300%, deep government spending cuts imposed, unrestricted imports
allowed, and state-owned companies downsized costing hundreds of thousands
of jobs before privatizing them.
There was more. Real wages
dropped 40%, poverty soared, but a privileged elite got rich. Public
anger grew with repression the antidote. Tanks rolled in the streets
against striking workers, and police targeted dissenters in union halls,
a university and factories. "Freedom" for Friedman was hell
for Bolivians. It would soon get worse.
The Tragedy of Post-Communist
Russia
The Berlin Wall's fall should
have been a triumph but instead was tragic for Russia's people. Mikhail
Gorbachev came to power in March, 1985 with political and social change
in mind but wasn't around long enough to lead it. He liberalized the
country, introduced elections, and favored a Scandinavian-style social
democracy combining free market capitalism with strong social safety
net protections. He envisioned "a socialist beacon for all mankind,"
an egalitarian society, but never got the chance to build it.
When the Soviet Union dissolved,
he was out, Boris Yeltsin became Russia's president, he supported a
corporatist state and adopted Chicago School fundamentalist "shock
therapy" masquerading as "reform." Its former apparatchiks
cashed in big along with a new class of "nouveaux billionaires"
(called "the oligarchs") who strip-mined the country's wealth
and shipped it to offshore tax havens. For the Russian people, it was
another story. They didn't know what hit them in what was one of the
greatest ever crimes by a government against its own people who still
today are crushed by it. The toll was devastating and pandemic:
-- 80% of Russian farmers
bankrupt;
-- about 70,000 state factories
closed causing an epidemic of unemployment;
-- 74 million Russians (half
the population) impoverished; for 37 million of them conditions were
desperate, and the country's underclass remains permanent;
-- alcohol, painkilling and
hard drug used soared, and HIV/AIDS threatens to become epidemic with
a 20-fold increase in infections since 1995; suicides also rose and
violent crime as well more than fourfold; and
-- Russia's population is
declining by around 700,000 a year; unfettered capitalism has already
killed off 10% of it; it's a startling condemnation of Chicago School
orthodoxy and the man who triumphantly spread it in the name of freedom
that's fake, ferocious and fatal.
The Curse of Predatory Capitalism
in South Africa
As in Russia, opportunity
for progressive change became tragedy under neoliberal Washington Consensus
policies far worse than apartheid repression. Nelson Mandela pledged
to support black economic empowerment and seemed poised to lead it when
ANC candidates swept the 1994 elections and he became president. Instead,
political power came at the expense of economic surrender. The former
white supremacist government and industrialists secured their wealth
and privilege by keeping unfettered capitalism unchanged under harsh
shock medicine rules.
It was unforgivable from
a man like Mandela with charisma and political capital enough to have
prevented it. Instead, he chose not to and brushed off later criticism
saying "....for this country, privatization is the fundamental
policy." The toll on his people was horrific:
-- double the number of people
living in desperate poverty on less than $1 a day from two to four million;
-- the unemployment rate
doubling to 48% from 1991 - 2002;
-- two million South Africans
losing their homes while the government built only 1.8 million others;
-- nearly one million South
Africans evicted from farms in the first decade of ANC rule; as a result,
shack dweller population grew by 50%, and in 2006, 25% of South Africans
lived in them with no running water or electricity;
-- the HIV/AIDS infection
rate at about 20%, and the ANC government denies its severity and does
little to alleviate it; it's a major reason why average life expectancy
in the country declined 13 years since 1990;
-- 40% of schools with no
electricity;
-- 25% of people with no
access to clean water and most with it can't afford the cost;
-- 60% of people with inadequate
sanitation, and 40% no telephones.
Freedom for black South Africans
came at a high price with political empowerment traded for economic
apartheid and no relief in sight for the millions affected. It's more
evidence of Chicago School economics failure and the human wreckage
it leaves everywhere.
Free Market Repression
in Haiti
Haitians enjoyed a brief
interregnum of freedom in the 1990s up to 2004 under Jean-Bertrand Aristide
and Rene Preval in his first term. Haitians were only once earlier free
when the first ever independent black republic was established January
1, 1804, but it didn't last.
Freedom again was lost for
one of the longest ever oppressed people anywhere. It ended February
29, 2004 when US Marines abducted Aristide, in a shocking middle of
the night coup d'etat, and flew him against his will to the Central
African Republic. Haiti is small, around three times the size of Los
Angeles, with a population around eight million. It has some oil, natural
gas and other mineral wealth, but it's main value is its human resource
that corporate giants want as an offshore cheap labor paradise for Wal-Mart's
"Always Low Prices."
Under President Aristide
and Preval in his first term in office, impressive social gains were
achieved, but they're are now lost in the wake of the 2004 coup. Haiti
is once again a free market paradise with freedom sacrificed (despite
an elected president) and real reforms gutted for the poorest people
in the hemisphere:
-- thousands of public sector
workers were fired;
-- many more thousands killed,
jailed, disappeared or forced into hiding;
-- many thousands of small
businesses burned and destroyed as well as homes for large numbers of
the poor;
-- unemployment and underemployment
rampant with up to two-thirds of workers without reliable jobs; destruction
of the country's rural economy an enormous problem with displaced poor
people migrating to urban areas but finding no work;
-- the lowest public sector
employment in the region at less than .7%;
-- education and health care
greatly deteriorated and mostly provided by NGOs, including church-based
ones;
-- life expectancy at only
53 years; the death and infant mortality rates the highest in the western
hemisphere;
-- the World Bank places
the country in its bottom rankings with its deficient sanitation systems,
poor nutrition, high malnutrition, and inadequate health services;
-- the country is the poorest
in the hemisphere with 80% of its population living below the poverty
line; it's also the least developed with lack of infrastructure, severe
deforestation and heavy soil erosion;
-- half its population is
"food insecure" and half of all children undersized from malnutrition;
-- less than half the population
with access to clean drinking water;
-- the country ranks last
in the hemisphere in health care spending with only 25 doctors and 11
nurses per 100,000 population and most rural areas having no access
to health care;
-- the highest HIV/AIDS incidence
outside Africa;
-- the World Bank estimates
Haiti's per capita income at under $450; the prevailing sweatshop wage
is around 11 - 12 cents an hour; the official minimum wage is about
$1.70 a day (with most Haitians getting less) with no benefits and inadequate
help from weak unions;
-- restructuring and privatizations,
like what's intended for the state-owned telecommunication company,
Teleco, cost thousands of jobs from downsizings;
-- human rights repression
is severe under a UN paramilitary MINUSTAH occupation masquerading as
peacekeepers; they were illegally sent for the first time ever to support
and enforce a coup d'etat against a democratically elected president;
political killings, kidnappings, disappearances, torture and unlawful
arrests and incarcerations are common forms of repression so real Haitian
democracy can't emerge under its elected president, Rene Preval, in
his second term; he's impotent against the power of US-orchestrated
plunder under Chicago School fundamentalist rules. Another Friedman
legacy of failure, this one close to home.
Free Market Fundamentalist
Destruction in Afghanistan
September 11 erased the familiar
world, created mass disorientation and regression, and made anything
possible under collective shock that didn't take long to unfold. The
"war on terror" was launched in a climate of fear with Afghanistan
first targeted. It inaugurated a brave new post-9/11 world. Its horror
continues. War rages, its ferocity intense, and no end is in sight for
a people and nation journalist John Pilger describes as having been
"abused and suffered more (with less help than any other) in living
memory."
War and conquest were planned
well in advance with 9/11 the pretext to launch it. It was part of a
grand strategic plan to control Central Asia's vast oil and gas reserves,
then on to the grand prize in the Middle East with Iraq its epicenter.
It began October 7, 2001, continues, and has now intensified at an enormous
cost to the Afghan people who've been torn by endless war and internal
turmoil for over two decades. The toll is horrific and rising:
-- half the population unemployed
with no improvement in sight nor is any planned under fundamentalist
market rules;
-- half the population earning
around $200 a year with those in the booming opium trade doing marginally
better;
-- poverty soared post-invasion,
one-fourth or more of the population needs food aid, and regional famine
risks remain;
-- life expectancy is one
of the lowest in the world at 44.5 years;
-- the infant mortality is
the highest in the world at 161 per 1000 births;
-- one-fifth of children
die before age five;
-- an Afghan woman dies in
childbirth every 30 minutes;
-- an estimated 500,000 homeless
are in Kabul alone including people living in collapsed and unsafe buildings;
-- only one-fourth of the
population has access to safe drinking water and adequate sanitation;
-- only one doctor is available
per 6000 people and one nurse per 2500 people;
-- 100 or more people are
killed or wounded by unexploded ordnance each month and rising violence
kills many more;
-- children are kidnapped,
sold into slavery or murdered for their organs bringing high prices
in the "free market" where everything is for sale including
body parts;
-- less than 6% of Afghans
have electricity only available sporadically;
-- women's literacy rate
is about 19%, conditions for them are very harsh, they're forced to
beg on the streets or turn to prostitution to survive; many must remain
veiled;
-- schools are burned and
teachers beheaded in front of their students;
-- basic services don't exist
and essential ones like schools, health clinics and hospitals are in
deplorable condition with no aid provided to improve them as all of
it goes for profit;
-- as in Iraq, occupying
forces operate outside the law with impunity that includes the use of
indiscriminate force, arbitrary arrests, indefinite detentions and free
use of the harshest types of torture unreported in the mainstream;
-- under military occupation,
democracy in the country is pure fantasy; the puppet president is a
caricature of a man and willing US stooge with no support or mandate
outside Kabul;
-- lawlessness is rampant,
war raging, violence increasing, the drug harvest and trafficking uncontrolled,
corruption massive, Sharia law reinstated, and life overall intolerable
in this free market fundamentalist paradise.
The Epicenter of
the "War on Terror" in Iraq for Market Fundamentalist "Freedom"
Iraq has the misfortune of
lying at the heart of the oil rich MIddle East where two-thirds of proved
reserves are located and the greatest potential amount of them untapped
for lack of development. Its potential remained frozen in time the result
of intervening wars since 1980, economic sanctions until 2003, and now
occupation and conflict for the most sought after real estate on earth
and a no-brainer why it was targeted.
At its core, the plan was
simple - a bold new experiment to erase a nation and create a new one
by invasion, occupation and reconstruction for pillage. It would transform
the nation into a fully privatized free market paradise with blank check
public funds for profit but none for Iraqis for essential needs, a sustainable
economy or critical local infrastructure.
The record of unfettered
capitalism is consistent. It leaves mass human wreckage everywhere.
In Iraq, it turned a bold new experiment into a horrific disaster:
-- an inferno of uncontrolled
violence throughout the country with new British O.R.B. independent
polling data estimating over 1.2 million Iraqi deaths since March, 2003
on top of about 1.5 million deaths from the Gulf war and economic sanctions
in place until the current war; the true toll may be even higher with
huge uncounted numbers of daily violent and non-violent deaths that
one estimate by Gideon Polya places at 3.9 million from 1990 to the
present; no one knows for sure;
-- the International Rescue
Committee and UNHCR estimating four million displaced Iraqis, including
those internally displaced, with 40,000 additional Iraqis fleeing their
homes each month; these figures may be conservative with true numbers
much higher;
-- a near-total breakdown
of essential services like electricity, drinking water, sanitation,
medical care, education, security and food for many;
-- mass unemployment and
extreme poverty in what was once "the cradle of civilization"
now erased for profit;
-- an overall humanitarian
disaster of epic proportions that continues to worsen with a July Oxfam
International and NCCI network of aid organizations report of other
grim findings:
-- eight million Iraqis needing
emergency aid - one-third of the population;
-- four million without enough
food;
-- 70% of Iraqis with no
adequate water supply;
-- 80% lack adequate sanitation;
-- 28% of children malnourished;
-- underweight baby births
tripled;
-- 92% of Iraqi children
with learning problems due to fear; and
-- a mass exodus of around
80% of doctors, nurses, teaching staff at schools and hospitals and
other vitally needed professionals.
In addition, local Iraqi
industry collapsed, kidnapping for ransom is a growth industry, the
country is a wasteland, its nation creation project bankrupt, and Iraq
today more closely resembles hell than "the cradle of civilization."
Iraq above all other nations
today is a ghoulish testimony to the myth of free market magic, but
it's even worse than that. It proves Friedmanomics a crime against humanity
and the man who led it a Nobel prize-winning fraud whose legacy is failure.
His real time record is so horrific, it's unrevealed in the mainstream
to suppress it.
It's endless foreign wars,
mass killing and destruction, detentions and torture, contempt for international
law, and total disregard for human rights and social justice everywhere.
At home, it's just as bad short of open warfare:
-- democracy is a fantasy
in a corporatist state placing profits over people;
-- the prison-industrial
complex is a growth industry;
-- social decay is increasing
as well as real human need;
-- social justice, civil
liberties and human rights are non-starters;
-- an unprecedented wealth
disparity exists in a rigid class society with growing poverty in the
richest country in the world that's also the least caring;
-- government is the most
secret, intrusive and repressive in our history;
-- the rule of law is null
and void;
-- a cesspool of uncontrolled
corruption prevails with no accountability;
-- a de facto one party state
exists with no checks and balances or separation of powers and a president
claiming "unitary executive" powers to do as he pleases and
does with impunity;
-- suppression of all dissenting
ideas and thoughts;
-- an out-of-control military-industrial
complex bent on world dominance; and
-- a mainstream media serving
as national thought control police gatekeepers glorifying wars, defiling
democracy and supporting imperial conquest and repression.
This is the legacy of the
man The Economist called "the most influential economist of the
second half of the 20th century (and) possibly all of it." Once
anointed, well funded and nurtured, he could never admit he was wrong
or apologize to millions of victims who proved his ideology was hokum.
Never have so many suffered so much to reveal the flimflam of one man
and the movement he led until his death. That's the dark side of "capitalism
and freedom" unmasked that his torrent of eulogies left out.
Stephen Lendman
lives in Chicago and can be reached at [email protected].
Also visit his blog site
at sjlendman.blogspot.com and listen to The Steve Lendman
News and Information Hour on TheMicroEffect.com this Saturday at noon
US central time but moving to Mondays at the same time October 8.
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