Myths of the Global Market

At the end of 2006, the journal of world economic affairs, The Economist, produced a banner issue on AHappiness and Economics@. The lead article unwittingly revealed an Achilles heel of Economics. It has no way of telling the universal needs of human beings from junk commodities for the masses, or gold toilet-seats for the rich.


Happiness Not


In fact, not even consumers in the developed world are happier by ever more market commodities. When scientific studies like Robert Lane=s The Loss of Happiness in Market Democracies (Yale, 2000) show that population satisfaction does not increase, but Aneatly reflects the law of diminishing returns@ as income and commodity consumption rise above a certain level, the message does not compute to economists or policy makers. The reason for this is that neoclassical economics is based on the first premise that market growth produces more happiness the more commodities are bought – so-called Amarginal utilities@ that correspond to prices paid.


If this baseline assumption is false, the paradigm collapses. So the ground is shifted to other claims. The Economist explains that many Agoods@ can be Aonly enjoyed if others don=t@[have them]. The falsehood of the first principle is diverted from by a shift to the nasty fact that some can only enjoy what they get if it is at others= expense. In the end, all that matters is willingness to pay a market price if one can afford it, the only measure of human welfare that exists in market and neoclassical doctrine.


Efficient , No


A logical person might think that the equation of paid prices to happiness is inane. But the problem is ignored. Instead, another shift of ground is relied on – how Aproductive and efficient@ the global market is. This assumption does not hold up any better. The global market system produces many times more wastes than any economic order in history. In his world-renowned text, Economics Paul Samuelson defines economic efficiency as Aabsence of waste@. But like all economists of the dominant paradigm, Samuelson includes only wastes that cost private enterprises money. So as long as pollution and damages to others can be externalized, it is Amore efficient@ – even if it is supremely wasteful. That is why global depredation of the most basic means of human life – breathable air, water aquifers, ocean life-systems, and people=s capacities to produce – are ignored in the economic models which governments use. These Aexternalities@ are kept off the books by public as well as private accounts.


Economic Goods, or Bads?


Such an economic calculus is fatal in the long term, but not questioned. That is why no principle of business or economics has been developed to distinguish commodities that cause disease from goods that enable people=s lives. With 25 years of market de-regulation, disease epidemics like cancer that are traceable to commercial carcinogens grow. But these too are ignored by government food-and-drug oveseers, cancer institutes and economists, as Samuel Epstein has argued since 1981. With the recently emerging obesity epidemic, an initiative by the UN Food and Agriculture Organization to inform consumers about healthy versus unhealthy foods was mounted in 2002, but was repressed. A 2004 warning by the U.S. Surgeon-General that Athe obesity epidemic is a bigger world problem than terrorism@ was also ignored. In Britain in 2007, public policy for color-coded warnings on cereals laden with sugar, salt and fat is now campaigned against by the war-chests of corporate food.


A tragic macro-spiral unfolds. The more the global market system produces and consumes, the more it cumulatively despoils and destroys human and ecological life systems. But preventative laws are repudiated as Atoo costly@ or Ainterference in the free market@. 


Even the eminent U.N. Scientific Panel on Climate Change does not connect climate destabilization to the causal mechanism producing the industrial gases. So new markets in Acarbon trading@are prescribed, and the life-blind market mechanism causing the problem is extended further. The global spiral downwards continues as long as the public accepts it.


Global Market Growth = Life-System Collapse


Turning market money-stocks into ever more money-stocks does not work unless regulated by life-standards. But de-regulation of the market has been an economic panacea since the Thatcher-Reagan era. A pattern of world-wide collapse of life-capital bases is thus increasingly structured into the globalizing system. From pseudo foods and consumables that cause most cancers, heart failures, and organic disorders to commercial pollutants and resource wastes that cause climate destabilization to species extinction spasms, exhaustions of fishstocks and arable soil, the same for-profit drivers are at work, but assumed as having Ano alternative@. Since corporations are bound by law to maximize profits for stockholders, they maximize all Aexternalities@ they can onto others as Anecessary to compete@. With governments declining into Athe best democracies that money can buy@, there is no public authority left to protect the common life interest. Instead, party leaders call for more market growth, and thus more life-system depredation. The causal link is taboo to mention.


Even long-standing precautionary standards are abolished as governments hand over hazardous product testing to private-sector Aclients@. Corporate PR campaigns hold the course. AWe must compete in the global market@ and  Abusiness is doing all it can to give consumers what they want@. Neoclassical economists tell us the market=s Ainvisible hand@ of competition ensures the Asocial optimum@, and this is the grand narrative of our age. Locked into mathematical chain-mail, this great myth appears rigorous and scientific until the collapse is right beside us with climate destabilization.


Not Science, but System Worship


The street level of the great myth is that all commodities are Agoods@, never Abads@. The rest is simple. Just add up the sales of the Agoods@, and you have the sum of society=s happiness and well-being. Throwaway junkfoods, mass violence entertainments, fossil-fuel leisure machines all count as much in National Accounts as organic foods, community water filters and home electricity.  Together with profitable mass-kill mechanisms to make war and clearcut ocean floors and forests, means of life destruction come to be invested in more than means of life. No economic school or business roundtable observes the macro-pattern.


When the question finally arises, Ahow do we steer out of global meltdown?@ the idea that market controls are required finally dawns as an economic imperative. Yet the universal life necessities all peoples need before stockmarket returns are not defined. Professional economics sees only Amarket demand@, while economists (and postmodernists) equate needs to wants. If market demand for a private weekend-jet counts more than a billion impoverished children=s need for clean water, then the weekend jet gets produced not the wells – with government subsidies for the jets while children die from dysentry. The truth is what sells.


Capital Destroyed, Not Developed


The deepest confusion is the equation of private money stocks to Acapital@. Real capital is wealth that produces more wealth – from ecological services and social infrastructures to scientific knowledge and technologies that produce life goods. All have been subjugated to private money-capital which produces nothing. Few recognize that money-capital is not real capital, but demand on real capital by private money-stocks seeking to be more. So every form of life capital is sacrificed to the growth of money capital – which is concentrated in the possession of about 2% of the population who invariably have more than the bottom 90%. This is waggishly called Awealth creation@. In fact it is not even an economic order. It is a system of predatory waste.


Anthropologists talk of Acultural insanity@, but avoid the ruling form of it. Jared Diamond=s famous book, Collapse (2005) is a case in point. He studiously blinkers out the money-capital drivers selecting for the emerging ecological and well-being meltdown. From stable hydrological cycles and a non-toxic sunlight supply to vocations for the young, every form of life capital is now factored out of for-profit decisions. Nourishing foods, public health-care and thriving biodiverse environments are selected against whenever it is more privately profitable to do so. The most basic life-capital formations – a sustainable topsoil mantle, the phytoplankton base of marine life, the biodiverse habitats of species reproduction, the biosphere itself – are all off the radar of the global market paradigm.


Life Capital and Real Economics


A sane economic order protects and develops its life-capital bases, and selects for means of life provision through time. All the life-needs to be provided for are recognized by one principle. Whatever our life capacities are reduced without is a life necessity, and nothing else is - breathable air, sense-open space and daily light, clean water, nourishing foods and self-waste disposal, shelter space from the elements, an environment whose elements and contours sustain and contribute to the surrounding life-host, safety and healthcare when ill or infirm, activities of language-logos/art-play to choose and learn from, meaningful work to perform for society=s reproduction and diversification, and self-governing choice in each=s enjoyment consistent with each=s provision. We conserve the conditions which make these possible – from stable water cycles and reproducing protein stocks to available energy sources – or we die one step at a time.


Past civilizations like the Sumerians, Khmers, Aztecs and – most dramatically – the recent A1000-year Reich@ went extinct through life-blind worship of their own systems.  We travel the same path. The difference is that we know what they did not. We have the economic instruments to apply across borders like public infrastructures, life-protective laws and standards, green and social taxes, and binding trade regulators. Above all, we have the world itself to lose. The problem is to recognize the myths of the global market before the collapse of the biosphere by its drivers.





Revised March 6, 2007



John McMurtry PhD, FRSC

University Professor Emeritus

University of Guelph




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