10.11.15

WHY DOING POLICY ANALYSIS IS HARD.

Frances Moore Lappé offers observations on political economy.  As the title of the piece is "Busting Six Free-Market Fictions, it's likely more about the indignation than the information.  Let's start with an instructive misconception.
If by "free market" we mean one unbounded by rules, it does not exist. All market economies are governed by rules. In ours, no one is allowed to sell babies, trade with terrorists, or sell liquor across the street from your kid's school.
Strip away the polemics, and there's a more important point. There can be no trade without rules of trading, which is to say ownership and contract are well-enough defined that buying and selling take place, with redress in the case of fraud or theft. Ms Lappé sort of gets this, but again, constructing some kind of straw man seems more important.
Think of the essentials to economic success that government provides, from legal structure to infrastructure. As for government being bad for business, this can hardly be true if in economies ranking among the world's most successful, government spending contributes a big part of the GDP.
Yes, although we can still productively debate whether government spending on the legal system, or on infrastructure, or on air forces, is the best use of money. Just for fun, work out how much government activity is symbiotic to commercial activity, and how much is parasitic thereon.

Then, we have to work through the incentives, and get beyond the vulgar one-dollar, one-vote canard.
If true, the market serves human freedom only on one condition: that people have purchasing power to express their values in the market. Thus freedom, using Friedman's own definition, actually expands as societies set rules ensuring that wealth is widely and fairly spread. By the same logic, a market operating without rules to prevent wealth from amassing at the very top denies most individuals' "freedom to choose." And, in many societies that includes the freedom to choose to eat.
Really? What's preventing people from pursuing wealth by providing cheap food?
We cannot enter the kitchen and select the menu. For example, we don't get to say, "No, it's not more choices among processed foods that I want. I want more plentiful, and less expensive, fresh fruits and vegetables."

True, our supermarkets typically carry thirty thousand items. Wow. But without "menu making" power via democratic government providing citizens a voice in public decisions, my choices--including those protecting my family's health as well as healthy soil and water--are extremely limited.
Really? I guess that fresh lettuce all year, and Chilean peaches in the winter and Michigan peaches in summer are a mirage.

No, they're worse than a mirage, they're a waste.
[P]onder the extreme inefficiency of a world food economy in which only 3 percent of the calories in feed going to cattle end up returning to consumers in beef.
That's inefficient if the resources used to produce the calories in that slider aren't priced accurately. Perhaps somewhere in Diet for a Small Planet or her other books Ms Lappé engages that.  But figuring out the ways in which the absence of prices and the presence of subsidies doesn't make for populist froth.
So here we are, trapped in six dangerous fictions creating a highly unfree market, one that leaves many of us denied freedom, the freedom to realize our full potential on a healthy planet. They blind us from understanding that a well-functioning market—one able to end hunger—is impossible without democratic government. Ironically, the market-is-all-we-need dogma ends up destroying the very conditions necessary to realize the market's prized strengths—openness, competition, and transparency.

In large part as a consequence of this dogma, now spreading far and wide, one-quarter of humanity now suffers nutritional deprivation in world of vast food abundance. This is what I mean by "dangerous" fictions—ideas that are literally killing us that we can crack open and leave behind.
"Democratic government" is something other than "government captured by rent-seekers" or "government by the caliphate" or "government of crony capitalists."  But that's too subtle, and the commenters on the piece don't grasp the subtleties either.

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