Market fundamentalism, also known as free-market fundamentalism, is a term applied to a strong belief in the ability of
unregulated ''
laissez-faire
''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups ...
'' or
free-market capitalist
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
policies to solve most economic and social problems.
[Block,Fred. ''Market Fundamentalism'', Longview Institute]
/ref> It is often used as pejorative by critics of said beliefs.[UNESCWAbr>''market fundemmentalism'', UNESCWA]
/ref>
Origins and use
Palagummi Sainath believes Jeremy Seabrook, a journalist and campaigner, first used the term.[Sainath, P. ''And then there was the market''.](_blank)
/ref> The term was used by Jonathan Benthall in an '' Anthropology Today'' editorial in 1991 and by John Langmore and John Quiggin
John Quiggin (born 29 March 1956) is an Australian economist, a professor at the University of Queensland. He was formerly an Australian Research Council Laureate Fellow and Federation Fellow and a member of the board of the Climate Change Aut ...
in their 1994 book ''Work for All''.
According to economist John Quiggin, the standard features of economic fundamentalist rhetoric are dogma
Dogma is a belief or set of beliefs that is accepted by the members of a group without being questioned or doubted. It may be in the form of an official system of principles or doctrines of a religion, such as Roman Catholicism, Judaism, Islam ...
tic assertions combined with the claim that anyone who holds contrary views is not a real economist.[ Quiggin, John. ''Rationalism and Rationality in Economics'', 1999, On Line Opinion,www.onlineopinion.com.au] However, Kozul-Wright states in his book ''The Resistible Rise of Market Fundamentalism'' that the "ineluctability of market forces" neoliberals
Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent fa ...
and conservative
Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
politicians tend to stress and their confidence on a chosen policy rest on a "mixture of implicit and hidden assumptions, myths about the history of their own countries' economic development, and special interests camouflaged in their rhetoric of general good".[Kozul-Wright, Richard and Rayment, Paul. ''The Resistible Rise of Market Fundamentalism: Rethinking Development Policy in an Unbalanced World''. London: Zed Books Ltd., 2007 p. 14 and Chapter 6] The sociologists Fred L. Block
Fred L. Block (born June 28, 1947) is an American sociologist, and Research Professor of Sociology at UC-Davis. Block is widely regarded as one of the world’s leading economic and political sociologists. His interests are wide ranging. He has ...
and Margaret Somers
Margaret R. Somers is an American sociologist and Professor of Sociology and History at the University of Michigan She is the recipient of the inaugural Lewis A. Coser Award for Innovation and Theoretical Agenda-Setting in Sociology, Somers's wor ...
use the label "because the term conveys the quasi-religious certainty expressed by contemporary advocates of market self-regulation".
Joseph Stiglitz
Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the J ...
used the term in his autobiographical essay in acceptance of Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
to criticize some International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
policies, arguing: "More broadly, the IMF was advocating a set of policies which is generally referred to alternatively as the Washington consensus
The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Mone ...
, the neo-liberal doctrines, or market fundamentalism, based on an incorrect understanding of economic theory and (what I viewed) as an inadequate interpretation of the historical data".[Autobiographical essay in acceptance of the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel]
/ref>
Critics of ''laissez-faire'' policies have used the term to denote what they perceive as a misguided belief or deliberate deception that capitalist
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private ...
free markets provide the greatest possible equity and prosperity,[Block,Fred. ''Reframing the Political Battle: Market Fundamentalism vs. Moral Economy'', Longview Institute](_blank)
/ref> or the view that any interference with the market process decreases social well-being. Users of the term include adherents of interventionist, mixed economy
A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economie ...
and protectionist
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. ...
positions[Bidstrup, Scott. ''Free Market Fundamentalism: Friedman, Pinochet and the "Chilean Miracle"'', Revised 10/15/02](_blank)
/ref> as well as billionaires such as George Soros
George Soros ( name written in eastern order), (born György Schwartz, August 12, 1930) is a Hungarian-American businessman and philanthropist. , he had a net worth of US$8.6 billion, Note that this site is updated daily. having donated mo ...
;[Beams, Nick. ''Soros warns of "market fundamentalism"''. WSWS : News & Analysis : World Economy 22 December 1998](_blank)
/ref> economists such as Nobel Laureates Joseph Stiglitz[Stiglitz, Joseph. ''Redefining the Role of the State - What should it do ? How should it do it ? And how should these decisions be made?'' Paper presented at the Tenth Anniversary of MITI Research Institute, Tokyo, March 1998.](_blank)
and Paul Krugman
Paul Robin Krugman ( ; born February 28, 1953) is an American economist, who is Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for ''The New York Times''. In 2008, Krugman was t ...
; and Cornell University
Cornell University is a private statutory land-grant research university based in Ithaca, New York. It is a member of the Ivy League. Founded in 1865 by Ezra Cornell and Andrew Dickson White, Cornell was founded with the intention to tea ...
historian Edward E. Baptist. Soros suggests that market fundamentalism includes the belief that the best interests in a given society are achieved by allowing its participants to pursue their own financial self-interest with no restraint or regulatory oversight.[ Soros, George]
"The worst market crisis in 60 years.
''Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
'', January 22, 2008 19:57
Critics claim that in modern society with worldwide conglomerates, or even merely large companies, the individual has no protection against fraud nor harm caused by products that maximize income by imposing externalities
In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either c ...
on the individual consumer as well as society. Historian Edward E. Baptist contends that "unrestrained domination of market forces can sometimes amplify existing forms of oppression into something more horrific" such as slavery
Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...
and that "market fundamentalism doesn't always provide the best solution for every economic or social problem".[Edward Baptist (September 7, 2014)]
What the ''Economist'' Doesn't Get About Slavery—And My Book
''Politico
''Politico'' (stylized in all caps), known originally as ''The Politico'', is an American, German-owned political journalism newspaper company based in Arlington County, Virginia, that covers politics and policy in the United States and intern ...
.'' Retrieved May 23, 2015.
See also
References
Bibliography and further reading
*
* Camerer, C. (1995): Individual Decision Making, in: Kagel, J.H. & Roth, A.E. (Eds.): Handbook of Experimental Economics, Princeton, Princeton University Press, 587–703.
* Cox, Harvey (2016). ''The Market as God.'' Harvard University Press
Harvard University Press (HUP) is a publishing house established on January 13, 1913, as a division of Harvard University, and focused on academic publishing. It is a member of the Association of American University Presses. After the retir ...
.
* French-Davis, Ricardo. ''Reforming Latin America's Economies: After Market Fundamentalism.'' Palgrave Macmillan, 2006.
*
* Kozul-Wright, Richard. ''The Resistible Rise of Market Fundamentalism: The Struggle for Economic Development in a Global Economy.'' United Nations Conference on Trade and Development (UNCTAD), London: ZedBooks Ltd., 2007.
*
*
*
*
External links
Longview Institute page on Market Fundamentalism
The free market is an impossible utopia
''The Washington Post
''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large n ...
,'' July 18, 2014.
{{DEFAULTSORT:Market Fundamentalism
Capitalism
Economic ideologies
Economic liberalism
Economic problems
Ideologies of capitalism
Neoliberalism
Political terminology