You are reading this more than a week since I wrote it. The chaos manifesting at the top of our government is accelerating, so anything I say here may have been completely overwhelmed by unfolding events. The president’s dementia is becoming increasingly apparent. In the last week, more people were shot in Minnesota, as he floods additional ICE thugs into the situation. NATO countries, normally our allies, sent military units to Greenland, to counter US threats of aggression there. The president wants to politicize the Federal Reserve, threatening the stability of the dollar, and cap credit card interest rates, disrupting the entire financial community. He acutely believes he is successful, and “joked” that elections may no longer be necessary. Literally nobody, perhaps not even the president himself, knows what he will say or do next. Is Maine at risk? or Cuba? or the entire American way of life?
This is not happening in a vacuum, but is a culmination. Adam Smith’s 1776 book, “The Wealth of Nations”, postulated that an unregulated capitalist economy, allocating resources by the hidden hand of the “free market”, is the best for the country. This has been used to justify the expansion of capitalism ever since.
But Smith listed several key assumptions necessary to validate his conclusion. Among them are equal access to information and capital, which never happens in reality. Because insider trading and limited access to funds are part of the real economy, greed and exclusive gain are amplified, distorting the market at the expense of the whole society.
Smith also assumed that all costs are included in the market price: another fiction, as many costs are externalized, not included in the price, often by design to make an item seem cheaper than it really is. This also distorts the economy, enriching a few and impoverishing the many, as all costs are eventually paid by someone, but rarely by the original seller who made the financial gain in the first place.
An example of an externalized cost was adding lead to gasoline. It did solve a problem in high compression gasoline engines, but caused lead poisoning and lasting health damage in the larger community. The gasoline and auto companies made money, but health care costs fall on the individual, who may not have realized the cause, or gained anything economically from the transaction. If the companies knew they were poisoning the people, they didn’t advertise that fact, because it would have scared people away from their product. Over time, the body of evidence grew to the point that governmental regulation forced the elimination of lead in gasoline.
This is one of the functions of government, acting for the good of society, against damages caused by the unrestrained economic gain of business. As capitalism has matured, entering the late-stage form of concentrating into massive industries, the government is the only agency with comparable clout to force an equitable resolution. An individual has neither the funds, time, nor expertise to fight an issue in court against a massive corporation.
As the post war economy boomed in America, public awareness of the adverse impact business makes on the world began to grow. Unrestrained capitalism kills people and the planet for profit. Rachel Carson published “Silent Spring” in 1962, launching the environmental movement, which was amplified by the 1969 oil spill in Santa Barbara. The Environmental Protection Agency (EPA) was formed in 1970 to modify that negative impact.
Of course, the business community, which has always been championed by Republicans, fought back, denying reality to preserve maximum profitability. Over the decades, the same playbook has been used by the tobacco, pesticide, and nuclear industries, among others. With sufficient money, it is possible to sell any lie. The planet is considered the ultimate land fill, and the value of people is diminished, to make the case against effective regulation of any kind.
Being rich his whole life, this Republican president personifies the myth of the “free market”, unrestrained by morals, ethics, or laws: a metaphor for the supreme individual, acting as if he is isolated from any collective context. Last week his EPA decided to limit concern to only the costs to businesses, totally ignoring the costs to society.
But being at war with a fact, at odds with reality, is the definition of insanity. Failure is inevitable. The only questions are: how soon, and what will survive his demented tantrums?
Crispin B. Hollinshead lives in Ukiah. This and previous articles can be found at cbhollinshead.blogspot.com.
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