The Language of Looting (how the word free market became twisted)

{ http://www.counterpunch.org/hudson02232009.html }

Michael Hudson, a research professor from University of Missouri, has written a lengthy but interesting article which explains the word "free market" isn't based on de-regulation, but on markets free from monopolies, unnecessary costs and interest payments.

The aim is to deter the analysis of what a “free market” really is: a market free of unnecessary costs: monopoly rents, property rents and financial charges for credit that governments can create freely.

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Terms that are the antithesis of “free market” also are being turned into the opposite of what they historically have meant. Take today’s discussions about nationalizing the banks. For over a century nationalization has meant public takeover of monopolies or other sectors to operate them in the public interest rather than leaving them so special interests. But when neoliberals use the word “nationalization” they mean a bailout, a government giveaway to the financial interests.

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He starts with the history of economics during the last centuries.

Economic writers from the 16th through 20th centuries recognized that free markets required government oversight to prevent monopoly pricing and other charges levied by special privilege. By contrast, today’s neoliberal ideologues are public relations advocates for vested interests to depict a “free market” is one free of government regulation, “free” of anti-trust protection, and even of protection against fraud, as evidenced by the SEC’s refusal to move against Madoff, Enron, Citibank et al.). The neoliberal ideal of free markets is thus basically that of a bank robber or embezzler, wishing for a world without police so as to be sufficiently free to siphon off other peoples’ money without constraint.

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And he ends with a stark statement.

Their alternative to true nationalization and socialization of finance is debt peonage, oligarchy and neo-feudalism. They have called this program “free markets.”

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I found the article provided an interesting point of view to the free markets.

Their alternative to true nationalization and socialization of finance is debt peonage, oligarchy and neo-feudalism. They have called this program “free markets.”

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Of course he is right.

Just take a look at the high managements : All belong to the same social group, sometimes they even know each other from high school !

The upper classes tend and try to keep everything within their ranks.

Alrik Fassbauer said:

Of course he is right.

Just take a look at the high managements : All belong to the same social group, sometimes they even know each other from high school !

The upper classes tend and try to keep everything within their ranks.

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Interesting that this exact sort of reasoning was used prior to WW2 to justify the oppression of the Jews and continues to be used by anti-Semitic groups to this day. But it's OK this time around...

dteowner said:

Interesting that this exact sort of reasoning was used prior to WW2 to justify the oppression of the Jews and continues to be used by anti-Semitic groups to this day. But it's OK this time around...

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That was complete non sequitur.

Not at all. Perhaps a bit of topic wander, although not really. The current bashing is making scapegoats of a certain group of people for political purposes. The historic situation made scapegoats of a certain group of people for political purposes. Excellent parallel, if I do say so, and should lend some important perspective to the article in question and the loud cheering I keep hearing for sentiments of that nature.

Ah so you're saying the politicians use the banking crisis to gain more influence and take over the banks because of greed for power instead of serving the public interests?

In that kind of scenario, there's crooks on both sides of the table.

dte said:

Excellent parallel, if I do say so, and should lend some important perspective to the article in question and the loud cheering I keep hearing for sentiments of that nature.

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The article claims not only what real nationalization would be about, but what free market economy should have been also like. But yes, it does lean towards more nationalization of the banks over the idea of goverment and tax payers funding the current way bankers run their businesses.

Edit: The sentiment is based on this assumption. If we help the banks of our countries, we should have some guarantee our money isn't going waste. Thus buying stock from the banks or possibly complete takeover in the name of public service.

Aside from those two options there's always the possibility the banks would be allowed to go bankrupt. Since most countries are already in a finacial slump, I wonder if the aftermath to that would really be that catastrophic afterall? The mortrage sector is already a mess.

dteowner said:

Not at all. Perhaps a bit of topic wander, although not really. The current bashing is making scapegoats of a certain group of people for political purposes. The historic situation made scapegoats of a certain group of people for political purposes. Excellent parallel, if I do say so, and should lend some important perspective to the article in question and the loud cheering I keep hearing for sentiments of that nature.

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You keep repeating this, dte, so I'm sure you can find us a few examples of Barack Obama or his proxies saying something scapegoating the rich. You know, along the lines of "The rich have been sucking America dry for thirty years, so now it's time they pay." Not something like "the fortunate, among whom I count myself, should be asked to bear a little bit bigger burden."

If you can't, of course I'll have to conclude that this class warfare thing only exists in your head (and that your repeated Holocaust comparisons are not only fallacious, but offensive in the extreme).

Actions, PJ, actions. There's no functional difference between your two "quotes", particularly for a political speaker in an election campaign. As for the comparison, I have stated before and will state again that I'm not comparing this class warfare to the Holocaust in any way. I AM comparing the political and social manuevers leading up to it, that enabled it to occur. There's no more offense, intended nor actual, to that than digging thru a generic sociology textbook.

How about the infamous "spread the wealth around" boo-boo? That sufficient to show his intent, or is a smoking gun not enough for you?

I shudder at the thought of an economic system where the government extends the only, or majority, credit.

dteowner said:

Actions, PJ, actions. There's no functional difference between your two "quotes", particularly for a political speaker in an election campaign. As for the comparison, I have stated before and will state again that I'm not comparing this class warfare to the Holocaust in any way. I AM comparing the political and social manuevers leading up to it, that enabled it to occur. There's no more offense, intended nor actual, to that than digging thru a generic sociology textbook.

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Nope, dte -- there's *all* the difference.

You're arguing that Obama's tax increase is class warfare and comparable to Hitler's demonization of Jews, because Obama is demonizing the rich. Rhetoric is at the core and center of demonization.

"I want to raise the marginal tax rate of people making more than $250k by 5%."

That's a statement of intent, entirely devoid of any "scapegoating" or "demonization" (your words, not mine).

"...because I believe the income structure of the country has become too skewed for stability."
"...because I believe that the fortunate have a moral obligation to shoulder more of the burden of supporting the country."
"...because the rich are living off the fat of the land at the expense of the poor and the middle class, and need to be cut down a notch."

Those are statements that explain the thinking behind the intent, and from where I'm at, only one of them is legitimately describable as "scapegoating" or "demonization" or "divisiveness."

How about the infamous "spread the wealth around" boo-boo? That sufficient to show his intent, or is a smoking gun not enough for you?

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A long way from enough. He is in no way blaming, scapegoating, or demonizing the rich in that statement.

Once more: you're the one making the analogy between Hitler scapegoating the Jews for the sorry state of Germany in the 1920's and early 1930's and Obama scapegoating the rich for the sorry state of the USA in 2009. That's a very inflammatory analogy, and you really do need to back it up by showing some examples of rhetoric that even distantly resembles the kind of stuff Hitler said about the Jews.

Or, of course, withdraw the accusation as the absurdity that it is.

I wouldn't say that Obama is demonizing the rich, and I wouldn't make the comparison to Hitler, but he is definitely engaging in class warfare, no matter how eloquent or seemingly benign he states it.

blatantninja said:

I wouldn't say that Obama is demonizing the rich, and I wouldn't make the comparison to Hitler, but he is definitely engaging in class warfare, no matter how eloquent or seemingly benign he states it.

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No more so than Bush or Reagan or almost any president ever. Politicians move things around and engage in social engineering, that's their job.

He's definitely doing it more than the last Bush, can't say as much about Bush I or Reagan though as I was too young to really be paying attention.

What's interesting is that Obama's proposals really won't affect the super rich, due to all the tax loopholes and such that they are able to exploit. What he effectively will be doing is to create a cap on wealth accumulation (more of a drag, but in long term an effective cap) by the middle class, making it significantly more difficult for them to move into the upper class, without bringing the upper class down significantly. He'll essentially be creating a semi-permanent divide between the upper and middle classes.

And what kind of "warfare" is this?
From Surlent's article above(I don't know how accurate this perspective is in terms of economic and historical soundness--but the point it's making expresses very accurately how a lot of people feel right now):

It seems incredible that people should accept today’s neoliberal idea of “market freedom” in the sense of neutering government watchdogs, Alan Greenspan-style, letting Angelo Mozilo at Countrywide, Hank Greenberg at AIG, Bernie Madoff, Citibank, Bear Stearns and Lehman Brothers loot without hindrance or sanction, plunge the economy into crisis and then use Treasury bailout money to pay the highest salaries and bonuses in U.S. history....
....In effect, the Treasury creates a new asset ($11 trillion of new Treasury bonds and guarantees, e.g. the $5.2 trillion to Fannie and Freddie). Interest on these bonds is to be paid by new levies on labor, not on property. This is what is supposed to re-inflate housing, stock and bond prices – the money freed from property and corporate taxes will be available to be capitalized into yet new loans.

So the revenue hitherto paid as business taxes will still be paid – in the form of interest – while the former taxes will still be collected, but from labor. The fiscal-financial burden thus will be doubled. This is not a program to make the economy more competitive or raise living standards for most people. It is a program to polarize the U.S. economy even further between finance, insurance and real estate at the top and labor at the bottom.

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Aren't both "classes" really being damaged here? And I thought America was designed to be a democracy, a more or less classless society...now suddenly there's accusatory rhetoric flying around of two classes who hate each other and want to destroy each other, who each want to gain an advantage by causing the other to suffer? The whole thing smells of political manipulation and makes my BS meter fly through the roof.

The whole idea of class warfare is a dangerous playtoy in times like these when we should all be working together.

The poor look to the wealthy as an example and a promise far more than they look to them as some kind of oppressor who must be overthrown. Right now, they have a bad aura of guilt by association because of a lot of poor practices and fraud in the financial industry, but no one in America seriously wants a society where a man can't get rich through his own hard work and acumen, even me.

blatantninja said:

He's definitely doing it more than the last Bush, can't say as much about Bush I or Reagan though as I was too young to really be paying attention.

What's interesting is that Obama's proposals really won't affect the super rich, due to all the tax loopholes and such that they are able to exploit. What he effectively will be doing is to create a cap on wealth accumulation (more of a drag, but in long term an effective cap) by the middle class, making it significantly more difficult for them to move into the upper class, without bringing the upper class down significantly. He'll essentially be creating a semi-permanent divide between the upper and middle classes.

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Really? The last Bush is renowned for introducing a number of tax cuts that massively favoured the rich, and at present the bulk of Obama's plans involve repealing those tax cuts . . . .

He's also planning on cracking down on tax avoidance, tax havens etc.

magerette said:

The whole idea of class warfare is a dangerous playtoy in times like these when we should all be working together.

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Another inflammatory phrase like "socialism", just something to throw around to make the other side's ideas look bad without coming up with any coherent arguments or alternatives.

magerette said:

Aren't both "classes" really being damaged here?

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That's debateable, especially since the labor of the 95% isn't being taxed more, and in most cases taxed less.

And I thought America was designed to be a democracy, a more or less classless society...

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Since when? The Founding Fathers obviously believed in class and capitalism itself will always produce classes. The only thing is that our class is based, at least theoretically, on what you can achieve yourself, not on direct hereditary entitlement (obviously some people do get inheritances though)

now suddenly there's accusatory rhetoric flying around of two classes who hate each other and want to destroy each other, who each want to gain an advantage by causing the other to suffer? The whole thing smells of political manipulation and makes my BS meter fly through the roof.

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I think hate is a bit of a strong word. It's more like both sides think the other isn't pulling their fair weight. The 'rich' think there are too many people getting handouts, not paying income tax at all, or paying significantly lower rates than them, while the not-'rich' think that since the 'rich' make/have more, they should pay significantly a larger percentage of their income/wealth.

The whole idea of class warfare is a dangerous playtoy in times like these when we should all be working together.

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I agree, which is why I think if we are going to raise taxes which I am not against, we should ALL be paying more, not just one group.

The poor look to the wealthy as an example and a promise far more than they look to them as some kind of oppressor who must be overthrown.

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That is very debatable.

but no one in America seriously wants a society where a man can't get rich through his own hard work and acumen, even me.

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Maybe not you, but the sense of entitlement in this country at all levels is extremely high.

Benedict said:

Really? The last Bush is renowned for introducing a number of tax cuts that massively favoured the rich, and at present the bulk of Obama's plans involve repealing those tax cuts . . . .

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I was saying that Bush didn't demonize the rich. Yes, that is what Obama is doing, but the question is were Bush's tax cuts necessarily bad? Obviously if he wanted to spend what he did in Iraq and on other programs, they didn't help the deficit, but from a fairness perspective, making the tax code less progressive isn't inherently bad, just as Obama making it more progressive isn't inherently good.

He's also planning on cracking down on tax avoidance, tax havens etc.

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Good luck with that. While I am all for eliminating tax fraud, I'll believe it when I see it.

Benedict said:

Another inflammatory phrase like "socialism", just something to throw around to make the other side's ideas look bad without coming up with any coherent arguments or alternatives.

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Do you deny that nationalized healthcare or significantly taxing the 'rich' more than the rest is not a tenant of socialism?

blatantninja said:

I was saying that Bush didn't demonize the rich. Yes, that is what Obama is doing, but the question is were Bush's tax cuts necessarily bad? Obviously if he wanted to spend what he did in Iraq and on other programs, they didn't help the deficit, but from a fairness perspective, making the tax code less progressive isn't inherently bad, just as Obama making it more progressive isn't inherently good.

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Ah right, fair enough, Bush didn't demonise the rich as his head was far too firmly wedged up their arses to even begin to try.

IMO bush's tax cuts were bad. THey massively swelled the US deficit and have left it badly prepared for the current situation for little to no "trickle down" benefit. Economics is always complex enough to argue whatever you want to be true though