Published in Snap Victoria Magazine March 2009

As economic events continue to unfold, we are once again reminded of the Streets’ (Wall and Bay) contempt for free markets despite continued rhetorical flourishes to the contrary.

Throughout this economic slowdown, the State has been ‘forced’ – we are led to believe – to step in and bail out massive conglomerates, financial institutions and insurers; organizations that, during the most recent economic boom, expected little State regulation, less State involvement and no State taxation.

Reviewing the historical record on the interaction between the State and the Street reveals that the role for the State is to create an environment wherein profits are privatized and risk is socialized. This relationship has precipitated a situation where the gap between capital and labour has reached levels last seen during the Great Depression.

Free markets, we are told, are also about reducing the size of the State. The historical record, however, reveals that it is not so much about shrinking the State, as it is about shifting the purpose of the State. Thus, from the 1970s onwards, there has been a concrete shift by the State away from social spending on items like health care, education and social security – items that benefit the vast majority – and towards corporate hand-outs on items like military hardware acquisitions, tax breaks for the highest income earners and massive bailouts for large conglomerates and their shareholders.

The same policies are vigorously pursued at the international level. As Ha-Joon Chang carefully notes in his most recent book, Bad Samaritans, the developed world consistently pressures developing nations to adopt ‘free trade’ policies that have little to do with free trade and everything to do with maintaining the historically exploitative relationship between ‘us’ and ‘them’; incidentally, such developed countries preach free trade while simultaneously providing generous subsidies for their own conglomerates. What Chang’s research reveals is that the developed world has attained its position at the peak not as a result of free trade, but by drawing on a portfolio of trade restrictive measures; and once at the top, kicks away the ladder by which other, developing countries may join them.

What the record reveals is that economic policies and social platforms have a crucial impact upon our standard of living. As we exit this federal prorogation and approach a provincial election, it may be important for each of us to consider which party has a platform that will best suit the interests of the vast majority, taking into account what the rhetorical flourish for free trade really means.

www.sahota.org

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