If Free Isn’t Fair Then It’s Not Free

“Since 1980, the U.S. government has reduced its intervention in the U.S. economy, which has become much more of a free market. Conservatives applaud this development because they think that free-market outcomes reward talent and hard work; progressives object to the income inequality of free-market outcomes and want to use government tax and transfer policy to reduce inequality.”

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Because conservative policies have often taken the form of reducing government programs and regulations, the ideology of a free market has been useful in rationalizing them. Other conservative interventions, however, have been less able to fit into the free-market mold, and therefore are especially revealing of conservatives’ genuine aims. When the financial crisis of 2008 threatened the survival of the large banks, they were quick to ask for the government to intervene with a large bailout. The “right-to-work” law recently passed in Indiana, designed to deprive unions of financial resources, is an explicit rejection of a market outcome—the private agreement between management and union to require all workers to pay their “fair share” of the costs of union representation. “Free-trade” agreements, ostensibly designed to eliminate restrictions on the movement of goods and capital, have nonetheless continued to restrict the free movement of people. Even the repeal of financial regulations in the 1980s and 1990s, ostensibly a free-market endeavor, created the anti-competitive giant financial firms that demanded to be bailed out in 2008.

The realization that the economy is rigged to benefit the rich and large corporations takes away the force of the right-wing argument that progressives want to use government to “vilify” the “successful” and reward the “slothful and incompetent.” When the game has been rigged, it is wrong to say that the market simply rewards talent and hard work, and the outcomes that result can hardly be called fair. When the market outcomes that we observe are unfair, we need to both change the rules for how the economy works and use the government to restore fairness.

Excerpts from Dollars & Sense, http://www.dollarsandsense.org/archives/2012/1112wolfson.html

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