The U.S. Chamber of Commerce launched yesterday “a sweeping national advocacy campaign … to defend and advance America’s free enterprise values in the face of rapid government growth and attacks by anti-business activists.”
The Chamber of Commerce doesn’t get it. They aren’t defending capitalism and free enterprise. They are all but destroying it.
Free-market fundamentalists don’t understand that capitalism is a system. It has rules, boundaries and obligations. When those rules are broken, the system falters.
• It’s not football without lines to mark touchdowns and out of bounds.
• It’s not basketball without a referee to call the fouls.
This is more than just a sports metaphor. Capitalism won’t work unless a negotiated price and promise to pay $100 is followed by payment of $100. And someone needs to enforce those rules. Otherwise it's not capitalism. It’s robbery.
These rules operate at every level.
• My AAA bond valued at $100 million actually needs to be worth $100 million, and it needs AAA assurance of quality — not conflicts of interest where companies issuing securities pay the agencies for their ratings.
• My “mortgage-backed security” needs to be backed by an actual buyer with an actual stake in real property — not bankers whose interest is in transaction fees from bundling, re-bundling and sales.
If nobody enforces those rules, the system starts to break down. That’s what’s happening now.
A generation ago, free-market ideologues decided that markets could police themselves and regulate themselves. They said history had finally invented something that was truly-self correcting. So they took the police off the beat and slandered as socialism every effort to enforce rules or enforce the reliability of promises.
Look at the result. Now we need to save capitalism from itself.
“We’re launching this campaign,” declared Thomas Donahue, President and CEO of the U.S. Chamber of Commerce, “because those who make or influence economic policy must understand that a productive, competitive private sector is not something they can take for granted.”
That’s precisely the point. A productive, efficient private sector is not something we can “take for granted.” It is something we need to fight for.
We need to fight against anti-competitive monopolies, fight against regulatory agencies captured by the industry they are supposed to regulate, and fight against industry groups that break the rules in the name of freedom.
Freedom isn’t free. The crisis interventions of recent months were needed to save capitalism from itself. The Chamber of Commerce got exactly what it wanted these last few years. We need to stop them before they kill again.