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"Capitalism and Freedom" Unmasked
By Stephen Lendman
10/04/07 "ICH" -- -- An era ended November 16, 2006 when
economist Milton Friedman died. A torrent of eulogies followed.
The Wall Street Journal mourned his loss with the same tribute
he credulously used when Ronald Reagan died saying "few people
in human history have contributed more to the achievement of
human freedom." Economist and former Treasury Secretary Lawrence
Summers called him a hero and "The Great Liberator" in a New
York Times op-ed; the UK Financial Times called him "the last of
the great economists;" Terence Corcoran, editor of Canada's
National Post, mourned the "free markets" loss of "their last
lion;" and Business Week magazine noted the "Death of a Giant"
and praised his doctrine that "the best thing government can do
is supply the economy with the money it needs and stand aside."
Rarely had so much praise been given anyone so undeserving in
light of the human wreckage his legacy left strewn everywhere.
He believed government's sole function is "to protect our
freedom both from
(outside) enemies....and from our fellow-citizens." It's to
"preserve law and order (as well as) enforce private contracts,
(safeguard private property and) foster competitive markets."
Everything else in public hands is socialism that for
free-wheeling market fundamentalists like Friedman is blasphemy.
He said markets work best unfettered of rules, regulations,
onerous taxes, trade barriers, "entrenched interests" and human
interference, and the best government is practically none at all
as anything it can do private business does better. Democracy
and a government of, by and for the people? Forget it.
He preached public wealth should be in private hands,
accumulation of profits unrestrained, corporate taxes abolished,
and social services curtailed or ended. He believed "economic
freedom is an end to itself....and an indispensable means toward
(achieving) political freedom." He thought state laws requiring
certain occupations be licensed (like doctors) a restriction of
freedom. He opposed foreign aid, subsidies, import quotas and
tariffs as well as drug laws he called a subsidy to organized
crime (which it is as well as to CIA and money laundering
international banks earning billions from it) and added "we have
no right to use force....to prevent (someone) from committing
suicide....drinking alcohol or taking drugs," while saying
nothing about major banks and CIA partnering for profit with
drug lords.
He favored a constitutional amendment requiring Congress balance
the budget because deficits "encourage political
irresponsibility." He claimed taxes were onerous and was "in
favor of cutting (them) under any circumstances and for any
excuse, for any reason, whenever possible...." and make
corporations entirely exempt from them. He opposed the minimum
wage, supported a flat tax favoring the rich, and believed
everyone should have to buy his or her own medical insurance
like any other product or service. Can't afford it? Too bad. Get
sick? Let the market heal you.
He opposed public education, supported school vouchers for
privately-run ones, and believed marketplace competition
improves performance even though voucher amounts are inadequate
and mostly go to schools emphasizing religious education or
training. Further, evidence shows teaching quality suffers in
for-profit schools except in elitist ones. Most others stress
cost-cutting and fewer services for bigger returns on
investment.
He ignored the fact that Christian fundamentalist schools harm
democracy and violate the constitutional separation of church
and state. They also threaten public education's future that's
been the bedrock of primary and secondary schooling throughout
our history until Friedman first proposed vouchers in the 1980s
as one of his core free choice objectives.
He was a vocal opponent of trade unions, claimed they were "of
little importance (historically in advancing) worker (rights and
gains) in the United States," and ignored clear evidence to the
contrary in spite of corrupted union officials who could and
should have done more for their rank and file and still don't.
He also claimed "the gains that strong unions win for their
members are primarily at the expense of other workers (and
believing otherwise) is a fundamental source of
misunderstanding." It all came down to supply and demand for him
- "the higher the price of anything, the less....people
will....buy."
Sounds reasonable up to the examples he gave: "Make labor of any
kind more expensive and the number of jobs of that kind will be
fewer. Make carpenters more expensive, and fewer houses....will
be built (and the ones that are will) use materials and methods
requiring less carpentry. Raise the wages of airline pilots
(and) there will be fewer jobs for them
(because) air travel will (cost more and) fewer people will
fly."
Bottom line for Friedman - high union wages harm everyone,
including union members. They make consumer products and
services more expensive, he believed, notwithstanding the
fundamental law of pricing every marketing executive knows but
Friedman ignored. It's to charge what the market will bear, no
more or less so, costs aside, prices reflect what buyers will
pay, no more.
Friedman also opposed government-run Social Security that he
called "The Biggest Ponzi Scheme on Earth" in an article with
that title. He described the current system as "an unholy
combination of two items: a flat-rate tax on earnings up to a
maximum with no exemption and a benefit program that awards
subsidies that have....no relation to need (forgetting it's our
most successful poverty-reducing program) but are based on
(criteria like) marital status, longevity and recent earnings."
He wanted it privatized, abhorred the "tyranny of the status
quo," and agreed with Barry Goldwater that it be voluntary
which, of course, would kill it. He added it's "hard to justify
requiring 100% of the people to adopt a government-prescribed
straitjacket to avoid encouraging a few (many millions, in fact)
'lower-income individuals to make no provision for their old age
deliberately (even though most cannot), knowing they would
receive the means-tested amount.' " Addressing only eligible
retirees, he ignored millions of others getting Social Security
benefits. They include disabled workers and spouses and children
of deceased, retired or disabled workers. They comprise around
37% of all recipients, are left out of Friedman's calculation,
and would get nothing under a privatized system.
For Friedman, we're on our own, "free to choose," but unequally
matched against corporate giants and the privileged with their
advantages. The rest of us are unequally endowed and governed by
the principle, "To each according to what he and the instruments
he owns produces," in a savage world where economic freedom
trumps all other kinds. This was right from Friedman's
1962 laissez-faire manifesto, "Capitalism and Freedom," that's
long on free market triumphalism and void on its effects on real
people.
He opposed social or any market-interfering democracy, an
egalitarian society, government providing essential services,
workers free from bosses, citizens from dictatorship and
countries from colonialism. Instead, he perversely promoted
economic freedom as a be-all-and-end-all, limited government,
and profit-making as the essence of democracy. He supported
unfettered free markets with political debate confined to minor
issues unrelated to the distribution of goods and services he
wanted left to the free-wheeling marketplace.
This was Friedman's best of all possible worlds with people in
it no different than disposable commodities and government not
obligated to fulfill its minimum constitutionally-mandated
function as stated in the Preamble and Article I, Section 8.
It's that "The Congress shall have power to....provide....for
(the) general welfare of the United States" - the so-called
welfare clause Friedman believed conflicted with "capitalism and
freedom" and our "freedom to choose" that ranked above the law
of the land for him.
The School of Thought in the University of Chicago's Economics
Department
Friedman grew up in New York, got his BA at Rutgers, an MA at
the University of Chicago, and his doctorate at Columbia.
Surprisingly, he was a Keynesian early on, but Friedrich Hayek's
teachings changed him into a free market fundamentalist who'd
become what the Economist called "the most influential economist
of the second half of the 20th century (and) possibly all of
it." He returned to the University of Chicago Economics
Department in 1946 and became its charismatic leader on a
mission to revolutionize his profession and the world.
The doctrine was simple at its core - unfettered free market
pure capitalism works best, and Friedman and his colleagues set
out to prove it scientifically in a set of mathematical
equations and computer models they developed. They promised that
left on their own, markets are magical. They produce the right
amount of products and services, at the right prices, by the
right number of workers earning the right amount of wages to buy
what's produced. In short, a win-win for everyone....paradise.
There was only one problem. It's voodoo science, sounds good
mathematically and doesn't work. Friedman and his "Chicago Boys,
however, believed it did but needed a real life "Chicago School
state" to prove it.
He got many, called them models of free market magic, and
justified repression believing ends justify means and free
choice offered "more room for individual initiative....a private
sphere of life (and a greater) chance (authoritarian regimes he
supported would in the end make it possible) to return to a
democratic society." He countered his critics claiming "economic
freedom is an essential requisite for political freedom" and
that transitional pain was worth it for the free market paradise
he promised would emerge. He and his mentor, Friedrich Hayek,
called social democracy, collectivism, socialism and welfare
state economics the "road to serfdom" producing "bondage and
misery" and "coercion rather than freedom."
It was pure baloney, but who could argue in the face of huge
corporate backing, heavy funding and the dominant media in tow
calling market fundamentalism the new orthodoxy and repression
freedom. On the ground, it was different. The record of Chicago
School fundamentalism is in the human wreckage it left
everywhere.
The Human Toll of Chicago School Fundamentalism
Every nation Friedman's ideology touched took pain, but it
wasn't the well-off who suffered, just ordinary working people
targeted for profit in pursuit of "economic freedom." Early on,
his dogma was considered quirky, on the margins of mainstream
economics, and out of step with the Keynesian post-war golden
age of capitalism. It lasted until the 1970s when recession,
stagflation and high unemployment changed everything. Keynesian
economics was unfairly blamed, and Friedman got his chance to
prove government intervention is the problem and unfettered free
markets the solution. It was pure nonsense and about as
scientific as alchemy, but long ago people thought that worked
until they finally understood they couldn't make gold out of
lesser metals.
The First Test Case in Chile
Chile under Augusto Pinochet became Friedman's first test case
to prove what we now know is flimflam. The results were
disastrous and Chileans to this day haven't recovered from the
September 11, 1973 coup d'etat and aftermath that ended the most
vibrant democracy in the Americas and ushered in Friedman's
magic.
The playbook promised paradise but delivered the junta's
"Caravan of Death," hyperinflation, the economy contracting 15%,
wages cut, unemployment at
20%, labor unionism destroyed, social services gutted, severe
poverty, ghostly factories and rotting infrastructure,
out-of-control corruption and cronyism, a massive transfer of
public resources to private hands, and a repressive military and
secret police targeting dissenters with detention, torture and
death. It was hell for Chileans but nirvana for the privileged
and foreign investors reaping big profits from the masses they
took it from. It was just the beginning with Friedman-style
"shock treatment" on to the next target.
One of many was Bolivia with predictable results and Friedman
unrepentant. Food subsidies were ended, social services gutted,
price controls lifted, wages frozen, oil prices hiked 300%, deep
government spending cuts imposed, unrestricted imports allowed,
and state-owned companies downsized costing hundreds of
thousands of jobs before privatizing them.
There was more. Real wages dropped 40%, poverty soared, but a
privileged elite got rich. Public anger grew with repression the
antidote. Tanks rolled in the streets against striking workers,
and police targeted dissenters in union halls, a university and
factories. "Freedom" for Friedman was hell for Bolivians. It
would soon get worse.
The Tragedy of Post-Communist Russia
The Berlin Wall's fall should have been a triumph but instead
was tragic for Russia's people. Mikhail Gorbachev came to power
in March, 1985 with political and social change in mind but
wasn't around long enough to lead it. He liberalized the
country, introduced elections, and favored a Scandinavian-style
social democracy combining free market capitalism with strong
social safety net protections. He envisioned "a socialist beacon
for all mankind," an egalitarian society, but never got the
chance to build it.
When the Soviet Union dissolved, he was out, Boris Yeltsin
became Russia's president, he supported a corporatist state and
adopted Chicago School fundamentalist "shock therapy"
masquerading as "reform." Its former apparatchiks cashed in big
along with a new class of "nouveaux billionaires" (called "the
oligarchs") who strip-mined the country's wealth and shipped it
to offshore tax havens. For the Russian people, it was another
story. They didn't know what hit them in what was one of the
greatest ever crimes by a government against its own people who
still today are crushed by it. The toll was devastating and
pandemic:
-- 80% of Russian farmers bankrupt;
-- about 70,000 state factories closed causing an epidemic of
unemployment;
-- 74 million Russians (half the population) impoverished; for
37 million of them conditions were desperate, and the country's
underclass remains permanent;
-- alcohol, painkilling and hard drug used soared, and HIV/AIDS
threatens to become epidemic with a 20-fold increase in
infections since 1995; suicides also rose and violent crime as
well more than fourfold; and
-- Russia's population is declining by around 700,000 a year;
unfettered capitalism has already killed off
10% of it; it's a startling condemnation of Chicago School
orthodoxy and the man who triumphantly spread it in the name of
freedom that's fake, ferocious and fatal.
The Curse of Predatory Capitalism in South Africa
As in Russia, opportunity for progressive change became tragedy
under neoliberal Washington Consensus policies far worse than
apartheid repression. Nelson Mandela pledged to support black
economic empowerment and seemed poised to lead it when ANC
candidates swept the 1994 elections and he became president.
Instead, political power came at the expense of economic
surrender. The former white supremacist government and
industrialists secured their wealth and privilege by keeping
unfettered capitalism unchanged under harsh shock medicine
rules.
It was unforgivable from a man like Mandela with charisma and
political capital enough to have prevented it. Instead, he chose
not to and brushed off later criticism saying "....for this
country, privatization is the fundamental policy." The toll on
his people was horrific:
-- double the number of people living in desperate poverty on
less than $1 a day from two to four million;
-- the unemployment rate doubling to 48% from 1991 -
2002;
-- two million South Africans losing their homes while the
government built only 1.8 million others;
-- nearly one million South Africans evicted from farms in the
first decade of ANC rule; as a result, shack dweller population
grew by 50%, and in 2006, 25% of South Africans lived in them
with no running water or electricity;
-- the HIV/AIDS infection rate at about 20%, and the ANC
government denies its severity and does little to alleviate it;
it's a major reason why average life expectancy in the country
declined 13 years since
1990;
-- 40% of schools with no electricity;
-- 25% of people with no access to clean water and most with it
can't afford the cost;
-- 60% of people with inadequate sanitation, and 40% no
telephones.
Freedom for black South Africans came at a high price with
political empowerment traded for economic apartheid and no
relief in sight for the millions affected. It's more evidence of
Chicago School economics failure and the human wreckage it
leaves everywhere.
Free Market Repression in Haiti
Haitians enjoyed a brief interregnum of freedom in the
1990s up to 2004 under Jean-Bertrand Aristide and Rene Preval in
his first term. Haitians were only once earlier free when the
first ever independent black republic was established January 1,
1804, but it didn't last.
Freedom again was lost for one of the longest ever oppressed
people anywhere. It ended February 29, 2004 when US Marines
abducted Aristide, in a shocking middle of the night coup d'etat,
and flew him against his will to the Central African Republic.
Haiti is small, around three times the size of Los Angeles, with
a population around eight million. It has some oil, natural gas
and other mineral wealth, but it's main value is its human
resource that corporate giants want as an offshore cheap labor
paradise for Wal-Mart's "Always Low Prices."
Under President Aristide and Preval in his first term in office,
impressive social gains were achieved, but they're are now lost
in the wake of the 2004 coup. Haiti is once again a free market
paradise with freedom sacrificed (despite an elected president)
and real reforms gutted for the poorest people in the
hemisphere:
-- thousands of public sector workers were fired;
-- many more thousands killed, jailed, disappeared or forced
into hiding;
-- many thousands of small businesses burned and destroyed as
well as homes for large numbers of the poor;
-- unemployment and underemployment rampant with up to
two-thirds of workers without reliable jobs; destruction of the
country's rural economy an enormous problem with displaced poor
people migrating to urban areas but finding no work;
-- the lowest public sector employment in the region at less
than .7%;
-- education and health care greatly deteriorated and mostly
provided by NGOs, including church-based ones;
-- life expectancy at only 53 years; the death and infant
mortality rates the highest in the western hemisphere;
-- the World Bank places the country in its bottom rankings with
its deficient sanitation systems, poor nutrition, high
malnutrition, and inadequate health services;
-- the country is the poorest in the hemisphere with
80% of its population living below the poverty line; it's also
the least developed with lack of infrastructure, severe
deforestation and heavy soil erosion;
-- half its population is "food insecure" and half of all
children undersized from malnutrition;
-- less than half the population with access to clean drinking
water;
-- the country ranks last in the hemisphere in health care
spending with only 25 doctors and 11 nurses per
100,000 population and most rural areas having no access to
health care;
-- the highest HIV/AIDS incidence outside Africa;
-- the World Bank estimates Haiti's per capita income at under
$450; the prevailing sweatshop wage is around
11 - 12 cents an hour; the official minimum wage is about $1.70
a day (with most Haitians getting less) with no benefits and
inadequate help from weak unions;
-- restructuring and privatizations, like what's intended for
the state-owned telecommunication company, Teleco, cost
thousands of jobs from downsizings;
-- human rights repression is severe under a UN paramilitary
MINUSTAH occupation masquerading as peacekeepers; they were
illegally sent for the first time ever to support and enforce a
coup d'etat against a democratically elected president;
political killings, kidnappings, disappearances, torture and
unlawful arrests and incarcerations are common forms of
repression so real Haitian democracy can't emerge under its
elected president, Rene Preval, in his second term; he's
impotent against the power of US-orchestrated plunder under
Chicago School fundamentalist rules. Another Friedman legacy of
failure, this one close to home.
Free Market Fundamentalist Destruction in Afghanistan
September 11 erased the familiar world, created mass
disorientation and regression, and made anything possible under
collective shock that didn't take long to unfold. The "war on
terror" was launched in a climate of fear with Afghanistan first
targeted. It inaugurated a brave new post-9/11 world. Its horror
continues. War rages, its ferocity intense, and no end is in
sight for a people and nation journalist John Pilger describes
as having been "abused and suffered more (with less help than
any other) in living memory."
War and conquest were planned well in advance with
9/11 the pretext to launch it. It was part of a grand strategic
plan to control Central Asia's vast oil and gas reserves, then
on to the grand prize in the Middle East with Iraq its
epicenter. It began October 7,
2001, continues, and has now intensified at an enormous cost to
the Afghan people who've been torn by endless war and internal
turmoil for over two decades. The toll is horrific and rising:
-- half the population unemployed with no improvement in sight
nor is any planned under fundamentalist market rules;
-- half the population earning around $200 a year with those in
the booming opium trade doing marginally better;
-- poverty soared post-invasion, one-fourth or more of the
population needs food aid, and regional famine risks remain;
-- life expectancy is one of the lowest in the world at 44.5
years;
-- the infant mortality is the highest in the world at
161 per 1000 births;
-- one-fifth of children die before age five;
-- an Afghan woman dies in childbirth every 30 minutes;
-- an estimated 500,000 homeless are in Kabul alone including
people living in collapsed and unsafe buildings;
-- only one-fourth of the population has access to safe drinking
water and adequate sanitation;
-- only one doctor is available per 6000 people and one nurse
per 2500 people;
-- 100 or more people are killed or wounded by unexploded
ordnance each month and rising violence kills many more;
-- children are kidnapped, sold into slavery or murdered for
their organs bringing high prices in the "free market" where
everything is for sale including body parts;
-- less than 6% of Afghans have electricity only available
sporadically;
-- women's literacy rate is about 19%, conditions for them are
very harsh, they're forced to beg on the streets or turn to
prostitution to survive; many must remain veiled;
-- schools are burned and teachers beheaded in front of their
students;
-- basic services don't exist and essential ones like schools,
health clinics and hospitals are in deplorable condition with no
aid provided to improve them as all of it goes for profit;
-- as in Iraq, occupying forces operate outside the law with
impunity that includes the use of indiscriminate force,
arbitrary arrests, indefinite detentions and free use of the
harshest types of torture unreported in the mainstream;
-- under military occupation, democracy in the country is pure
fantasy; the puppet president is a caricature of a man and
willing US stooge with no support or mandate outside Kabul;
-- lawlessness is rampant, war raging, violence increasing, the
drug harvest and trafficking uncontrolled, corruption massive,
Sharia law reinstated, and life overall intolerable in this free
market fundamentalist paradise.
The Epicenter of the "War on Terror" in Iraq for Market
Fundamentalist "Freedom"
Iraq has the misfortune of lying at the heart of the oil rich
MIddle East where two-thirds of proved reserves are located and
the greatest potential amount of them untapped for lack of
development. Its potential remained frozen in time the result of
intervening wars since 1980, economic sanctions until
2003, and now occupation and conflict for the most sought after
real estate on earth and a no-brainer why it was targeted.
At its core, the plan was simple - a bold new experiment to
erase a nation and create a new one by invasion, occupation and
reconstruction for pillage. It would transform the nation into a
fully privatized free market paradise with blank check public
funds for profit but none for Iraqis for essential needs, a
sustainable economy or critical local infrastructure.
The record of unfettered capitalism is consistent. It leaves
mass human wreckage everywhere. In Iraq, it turned a bold new
experiment into a horrific disaster:
-- an inferno of uncontrolled violence throughout the country
with new British O.R.B. independent polling data estimating over
1.2 million Iraqi deaths since March, 2003 on top of about 1.5
million deaths from the Gulf war and economic sanctions in place
until the current war; the true toll may be even higher with
huge uncounted numbers of daily violent and non-violent deaths
that one estimate by Gideon Polya places at 3.9 million from
1990 to the present; no one knows for sure;
-- the International Rescue Committee and UNHCR estimating four
million displaced Iraqis, including those internally displaced,
with 40,000 additional Iraqis fleeing their homes each month;
these figures may be conservative with true numbers much higher;
-- a near-total breakdown of essential services like
electricity, drinking water, sanitation, medical care,
education, security and food for many;
-- mass unemployment and extreme poverty in what was once "the
cradle of civilization" now erased for profit;
-- an overall humanitarian disaster of epic proportions that
continues to worsen with a July Oxfam International and NCCI
network of aid organizations report of other grim findings:
-- eight million Iraqis needing emergency aid - one-third of the
population;
-- four million without enough food;
-- 70% of Iraqis with no adequate water supply;
-- 80% lack adequate sanitation;
-- 28% of children malnourished;
-- underweight baby births tripled;
-- 92% of Iraqi children with learning problems due to fear; and
-- a mass exodus of around 80% of doctors, nurses, teaching
staff at schools and hospitals and other vitally needed
professionals.
In addition, local Iraqi industry collapsed, kidnapping for
ransom is a growth industry, the country is a wasteland, its
nation creation project bankrupt, and Iraq today more closely
resembles hell than "the cradle of civilization."
Iraq above all other nations today is a ghoulish testimony to
the myth of free market magic, but it's even worse than that. It
proves Friedmanomics a crime against humanity and the man who
led it a Nobel prize-winning fraud whose legacy is failure. His
real time record is so horrific, it's unrevealed in the
mainstream to suppress it.
It's endless foreign wars, mass killing and destruction,
detentions and torture, contempt for international law, and
total disregard for human rights and social justice everywhere.
At home, it's just as bad short of open warfare:
-- democracy is a fantasy in a corporatist state placing profits
over people;
-- the prison-industrial complex is a growth industry;
-- social decay is increasing as well as real human need;
-- social justice, civil liberties and human rights are
non-starters;
-- an unprecedented wealth disparity exists in a rigid class
society with growing poverty in the richest country in the world
that's also the least caring;
-- government is the most secret, intrusive and repressive in
our history;
-- the rule of law is null and void;
-- a cesspool of uncontrolled corruption prevails with no
accountability;
-- a de facto one party state exists with no checks and balances
or separation of powers and a president claiming "unitary
executive" powers to do as he pleases and does with impunity;
-- suppression of all dissenting ideas and thoughts;
-- an out-of-control military-industrial complex bent on world
dominance; and
-- a mainstream media serving as national thought control police
gatekeepers glorifying wars, defiling democracy and supporting
imperial conquest and repression.
This is the legacy of the man The Economist called "the most
influential economist of the second half of the 20th century
(and) possibly all of it." Once anointed, well funded and
nurtured, he could never admit he was wrong or apologize to
millions of victims who proved his ideology was hokum. Never
have so many suffered so much to reveal the flimflam of one man
and the movement he led until his death. That's the dark side of
"capitalism and freedom" unmasked that his torrent of eulogies
left out.
Stephen Lendman lives in Chicago and can be reached at
lendmanstephen@sjlendman.blogspot.com.
Also visit his blog site at sjlendman.blogspot.com and listen to
The Steve Lendman News and Information Hour on
TheMicroEffect.com this Saturday at noon US central time but
moving to Mondays at the same time October 8.
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