I have been asked what I mean when I say that free market theory is a fraud and a lie. There is no room in a blog like this to answer this adequately, but I will give an example and if anyone wishes I will be happy to expand on it in future posts.
As you know, neoliberals are constantly assuring us that there is no alternative to their policies and prescriptions. This is because they are basing their policies on economic concepts that they regard as both scientific and true, that is their language, not mine. Such concepts are neither scientific nor true because economic concepts must never be regarded as anything other than general propositions that are only applicable under certain conditions. Economics is a study of human behaviour, and no study of human behaviour can ever be regarded as supplying scientific 'facts' or 'truths'. However, modern economists do consider their work as both mathematical and scientific, so, their conclusions must not be challenged or substituted by alternatives, because, as their theories are mathematical, scientific and true, all alternatives are by definition wrong. As a result, any political policy that emanates from the application of such theories are themselves the right thing to do and have no alternative as they are based on conclusions that are scientific and true. Take the free market approach to unemployment and the public policy that subsequently emerges as a result.
Neoclassical economic theory argues that market forces operate in such a way that they establish what is known as ‘equilibrium’ in the economy. Equilibrium is balance, and it happens because in a free competitive market system, the market efficiently establishes a harmonious relationship between the competing interests of individuals engaged in freely trading with one another. One area in which this will occur is in the labour market because, it is claimed, the free enterprise economic system will automatically establish equilibrium in a situation where there is no ‘voluntary’ unemployment. If there is any unemployment it will by necessity be temporary because unemployment will produce an excess of labour that will then result in a fall in the price of labour, ie. wages. As a result of an economic concept known as marginal utility, the fall in wage rates will then create more employment, thus resolving the temporary problem of unemployment. However, the result of this theoretical construct is that any long-term unemployment in the economy must be, by definition voluntary, because the market has inbuilt mechanisms that automatically cure any structural forms of unemployment, and this is so because the concept of marginal utility is designated as a 'law'. Economists claim that the law of diminishing marginal utility is a 'scientific construct'. Therefore, if there is any long-term unemployment in society, it is not real unemployment, it is voluntary and therefore artificial, and is the result of lazy people who simply do not want to work; they volunteer to be unemployed, the skivers and shirkers, the benefit scroungers of British government mythology. Thus, society cannot be responsible for unemployment because the free marketeers have a religious belief in Thatcher's claim that there is no such thing as society, the market cannot be responsible for unemployment as it will cure it by itself if left alone, so, the responsibility for unemployment lies with individuals who simply don’t want to work, and trades unions who interfere with wages and the free workings of the labour market. As a result, both those groups will need to be subjected to the disciplines of the market and must not be rewarded for their selfish and anti-social behaviour. This is so obviously incorrect that no intelligent person can afford it any credibility. That is why it is not wrong, it is a lie, and most of these people know its a lie. The problem is that the clowns who front this nonsense in Westminster probably believe it because they are fundamentally stupid people. If you don't believe me just watch the next hustings for the candidates for the Labour leadership. Cameron and Osborne believe it, but they are Tories and as John Stuart Mill told us, not all Conservatives are stupid people, but most stupid people are Conservatives.
The above theoretical fantasy is the basis for the Westminster war against the unemployed and people on social security. It of course bears little relation to reality but forms the basis for all Westminster policy. We now have the spectacle of Labour announcing that they are accepting all of the Tories proposals on welfare announced in the budget. As I repeatedly say, this is a Westminster problem and is unresolvable within the Westminster system of government because there is unanimity between the parties on the causes and solutions to the poor and disadvantaged. I remind you, their solution is slavery. You have been warned
Your Servant
Doktor Kommirat
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