If the financial crisis of 2008 and current recession that it lead to proved anything it is that Reagan-style, free-market capitalism does not work. The right-wing laissez faire philosophy that the market must be left free of government regulation so the “Invisible Hand” can do its magic work has been revealed to all as the complete shame it is.
The guiding principle of Western free-market economics--lavish the rich with profits and tax-cuts and this money will somehow “trickle down” the economic ladder to the rest of us--is an absurd fantasy designed to maintain the interests of the wealthy few at the expense of the poor and dwindling middle-class. Indeed, perhaps the greatest failure of the Obama administration is its refusal to use the economic crisis as an opportunity to vastly rethink our capitalist society.
For that, one must turn to Raj Patel, author of The Value of Nothing: How to Reshape Market Society and Redefine Democracy (2009). An activist and African Studies scholar at UC Berkely, Patel’s book examines how the myopic mentality of viewing the entire world through the lens of the free-market got us into this mess. In a “market society” that places a monetary price on everything (including natural resources like land, water and the air we breathe), Patel argues, it is inevitable that the planet itself will become another commodity.
He uses Oscar Wilde’s prescient quote that “people know the price of everything and the value of nothing,” to frame his thesis. Given Wilde’s observation, Patel correctly notes that, if all things were priced based on their actual cost (including the labor required to produce the item as well as its environmental toll) a hamburger would cost around $200.
Patel writes, “According to one estimate, the energy cost of the 550 million Big Macs sold in the United States every year is $297 million, producing a greenhouse gas footprint of 2.66 billion pounds of CO2 equivalent…. While none of these costs are reflected in the drive-thru price of a Big Mac, they still have to be paid by someone. It’s just that they are paid not by the McDonald’s Corporation but by society as a whole, when we pay the costs of environmental disasters, climate-change-related migration and higher health care costs.”
Patel calls these hidden, often overlooked costs “externalities.” “These are the costs that somehow slip through the net of prices,” he writes. And, of course, it is in the interest of profit-driven corporations like McDonald’s to not only avoid paying for these externalities themselves, but to keep its customers from considering them as well. (This process is also referred to as Commodity Fetishism.)
Through this process of placing a cheap monetary price on everything, Patel argues, we have lost a great deal of our “common” areas--natural land, or public spaces that were once believed to be collectively owned by all citizens. We have also, Patel suggests, lost a sense of civic responsibility—particularly here in the U.S. where democracy consists of little more than showing up to vote in elections every four years.
The first half of Patel’s book looks at the problem of the free-market mindset that attaches a dollar value to everything. (Patel notes how even longtime free-market disciple, Alan Greenspan, was forced to admit to a Congressional panel he found a “flaw” in his economic philosophy.) He uses this section to analyze different theorists’ (Keynes, Adam Smith, John Locke, Rousseau and Karl Marx) views on economics and how an ideal market society would be run.
The book’s second half examines some partial solutions on how to “redefine democracy.” This is typically where progressive authors like Patel struggle—-a common complaint reiterated by Guardian reviewer, John Gray. Still, while this section of Patel’s book becomes rather jumbled and unfocused, he offers more solutions than Gray gives him credit for. Like Naomi Klein’s No Logo, Patel provides various examples of local citizens who have fought against corporate rights, privatized resources and declining civil liberties and won.
“We’ll never be able to see the world clearly through the glass of the market,” Patel writes. “…We've been socialized into thinking only in terms of the money value of something, but thinking this way shrinks us.”
He adds, “In order to reclaim politics, we…will need more imagination, creativity and courage. We will need to remember that democracy’s triumphs come not from the ballot box but from the circumstances that make democracy possible: equality, accountability and the possibility of politics.”