State Capitalism and the Myth of the Free Market

"Downturn Gains Steam as Inflation Roars Ahead"
"Bernanke: Economy faces 'numerous difficulties"
"Report: 150 Banks Could Fail Over Next 18 Months"
"Bush Administration Moves to Bail Out Mortgage Companies"

With headlines like this everyday across the country, are advocates of globalization and “free-market” ideology ready to admit that something is wrong, or at the very least, that there is nothing “free” about the market. For those that champion it, the market is “free” only when it continues to make the richest people in this country richer while keeping the rest content enough not to raise hell. But now it has gotten so bad that what the government has always done, which is subsidize large corporations who then keep the profits for themselves, has gotten national attention. If the free market existed, wouldn’t the so-called “invisible hand” of capitalism have drowned corporations like Bear Stearns, Fannie Mae, and Freddie Mac? Without the government’s help, and taxpayer’s money, these companies would sink. The rationale given by politicians is that if these companies were to go under, the economy would collapse. Doesn’t that mean that this system, which proponents claim is self-sustaining, cannot survive without state intervention. How is this not state capitalism, which in ideology, is precisely the opposite of free-market capitalism? The very same politicians who run on small government are now pushing for billions of dollars in state intervention to save the sinking system that has made them all rich. As is often the case with the United States government there is a double standard at work: state intervention is wrong when it means regulating multinational corporations but ok when it means bailing them out. Where is all the free-market ideology now? This crisis is the result of the capitalist tendency, no necessity, to look no further than the bottom line. Capitalism’s short sightedness and unchecked deregulation has caught up to the United States in what many are calling the worst financial crisis of our lifetime. And still no one challenges or questions the anonymous monster behind it all: state-capitalism. Slavoj Žižek describes this phenomenon:

“when we pass from the notion of crisis as occasional contingent malfunctioning of the system to the notion of crisis as the symptomal point at which the ‘truth’ of the system becomes visible, we are talking about one and the same actual event—the difference is purely virtual, it does not concern any of its actual properties, but only the way this event is supplemented by the virtual tapestry of its ideological and notional background.”

Reading Žižek can sometimes be frustrating. He works out his theories as he goes and reading his work is witnessing this process live. If you try and pick up and understand everything you will get lost, so you have to extract nuggets of insight whenever you can. This quotation perfectly describes how the government/media (the line is blurry) is handling this economic crisis. It is a well-known taboo to question capitalism, in fact it is even taboo to say capitalism anymore. Instead it is the anonymous system to which there is no alternative. I know that some will read this post and say that capitalism works and there’s no better system. They

"claim that Capitalism is today so global and all-encompassing that they cannot ‘see’ any serious alternative to it, that they cannot imagine a feasible ‘outside’ to it [… but] the task is not to see the outside, but to see in the first place (to grasp the nature of contemporary capitalism)—the Marxist wager is that, when we ‘see’ this, we see enough, including how to go beyond it…So our reply to the worried progressive liberals, eager to join the revolution, and just not seeing it having a chance anywhere, should be like the answer to the proverbial ecologist worried about the prospect of catastrophe: do not worry, the catastrophe will arrive…"

This is the conversation I want, and we need to have as Americans. “Although the sphere of the economy appears ‘apolitical,’ it is the secret point of reference and structuring principle of political struggles” and if you're paying attention, it appears that the catastrophe may be arriving sooner than later. A small part of me wants things to get worse before they get just better enough for people to forget that they are being raped by the system. Gas prices are the perfect allegory for how the system operates. People all over America are catching themselves being happy when gas drops to $4 a gallon. They have to remind themselves that a year ago it was under $3, and three years ago it was around $2. Likewise, before we become content with policies that are meant to keep us at bay, we need to remember that in the richest country in the world, inequality grows, wages stagnate and the middle class disapears. Perhaps more importantly we need to remember that the system which is responsible for all of this depends on our compliance, because ironically, we work to maintain these debilitating trends.