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The “Free Market”: The Greatest Terror Of All

by Richard Mellor Sunday, Jan. 22, 2006 at 7:46 PM

The economic system of production we live in is called capitalism or the free market. We are supposed to be fortunate because we are free to starve to death amidst abundance. This form of social organiztion has not existed for all time and need not exist in the future. The first step in eliminating it is accepting this simple idea.

By Richard Mellor

Retired member, AFSCME Local 444

Oakland CA

Jaqcquelyn Brechtel Clarkson, a New Orleans city council member is a big fan of the “free market”. In the controversy over the re-building of New Orleans she makes her position very clear, “There’s nothing better than free enterprise and the free market to decide how this city is rebuilt.” (1)

Ms Clarkson leaves out one important lesson that should be absorbed by all working people; it was free enterprise and the free market that destroyed New Orleans. This omission is no accident; after all, Ms Clarkson is a political representative of the capitalist class, of big business. Sitting on the board of the Louisiana Realtors she has a vested interest in building anywhere, anytime. And the aftermath of Katrina has opened up some real opportunities for the real estate business. Politicians like Ms Clarkson, Bill Clinton or George W Bush will always tell us they enter politics to serve the “American people.” They simply fail to tell us which American people.

The destruction of New Orleans was not a natural disaster but a social one. Leaving aside the fact that the increased frequency and strength of hurricanes is widely believed to be caused by global warming, itself a free market product, the inability of the levees to withstand such a force as Katrina was well documented. Monies necessary for strengthening the levees were used for the war in Iraq where privatization of huge sectors of the Iraqi infrastructure have been accomplished by the bomb and thousands of Iraqis and Americans have died as a result.

Ms Clarkson also represents New Orleans District C which includes the French Quarter, a commercial center and therefore more important than working class communities. The communities where the low- waged who worked in the French Quarter live, Ms Clarkson wants to rebuild according to the laws of the market that caused the destruction in the first place. Naturally, being in the real estate business and on the board of the Louisiana Realtors is just a lucky break for this businesswoman. Her political decisions have nothing to do with her business interests she would have us believe. But for the big landlords, bankers, speculators and other moneymakers, Katrina has been a gift from above.

A few hours plane ride from New Orleans, in Detroit Michigan, the free market is wreaking havoc on another sector of American workers. The auto bosses have gone after their employees with a vengeance. Following on the heels of the airline bankruptcies, Delphi Corporation, the auto parts maker spun off from GM in 1999 has declared bankruptcy in order to renege on its contractual obligations regarding employee pensions. This is despite the fact that Delphi is not broke. The employers are using the bankruptcy courts to get around contract obligations with unions. In actuality, the employers, their politicians and the courts that serve their interests are joining together in a more open fashion in order to eliminate all the gains made during the rise of the CIO in the thirties and the civil rights movement that followed. Their efforts are made even easier by the capitulation of the heads of the AFL-CIO to this process. In auto, the UAW leadership has agreed to concessions in wages and retirement benefits and has done nothing to prevent job losses.

Labor leaders, the so-called labor-friendly politicians in the Democratic Party, and the academics who give them intellectual justification for their failed policies argue that the climate is not favorable for workers to make demands on the employers. But this is absurd. According to the Financial Times, profit margins and profits are at a 30 and 50 year high respectively. (2) A recent study published by Linda Bilmes of Harvard and Joeseph Stglitz of Columbia estimates that the Iraq war, under a moderate scenario, will cost at least .1 trillion. Martin Wolf of the Financial Times comments, “to put this in context, the minimum budgetary cost is 10 times the world’s net annual official development assistance to all developing countries.” The world is awash with cash.

The crisis in New Orleans is a free market crisis, a crisis of capitalism. The attacks on workers from Detroit to Bombay are a product of the system not the results of greed in the abstract, bad management practices or corrupt CEO’s and politicians. A political party does not exist in a vacuum; it represents class interests. The politicians in the Democratic and Republican parties are simply representing their class interests when they carry out policies that devastate workers, our communities and our well-being. The fact that they’re corrupt is secondary but still costly for working people.

The recent scandal involving the Washington lobbyist Jack Abramoff is a prime example of the rottenness of the present system and its political representatives. Robert Livingston, a former Republican congressman turned lobbyist, claimed on CNN, that “Abramoff was an aberration.” This is the news for our ears. But in the Wall Street Journal, the paper that capitalism writes for itself rather than mass consumption, John Shadegg an Arizona Republican writes: “Powerful members of Congress are able to insert provisions giving away millions -- even tens of millions -- of dollars in the dead of night. The recent scandals involving Duke Cunningham and Jack Abramoff have highlighted the problem, but this is not just a case of a few bad apples.” (4) They have to tell the truth to each other to a certain extent, as their system is not without rules. Livingston, like most retired politicians likes the lucrative lobbying business. According to a new study by, 43 percent of Congressional members who have left office since 1998 have registered to lobby. No wonder Livingston paints Abramoff as an aberration in the mass media; thieves don’t like their profession maligned.

The two examples above, New Orleans and auto, are a clear example of the failure of the capitalist system where the major forces of production are in private hands. When we say that working people can run society panic sets in. “This is communism” the capitalists will cry”, and the former dictatorship in the Soviet Union will be re-borne in the press. The less hostile will say we are only dreaming, that workers can never run society (we can just fight and die for it), “it’s a good idea…but”, the “but” meaning human nature is inherently greedy and exploitive. And society cannot function without the Carl Icahn’s and Kirk Kerkorian’s of this world owning the factories, the airlines, the mines and deciding with their friends what should be produced, when and how; what should be built and where.

But despite it’s degeneration into a totalitarian dictatorship, the revolution in Russia showed that workers can run society just like Wilbur and Orville Wright’s experiment with flight proved that we could make machines that fly; they didn’t stop the experiment because the model crashed. The Seattle general strike of 1919 showed too that working people can actually administrate society through workers’ councils or committees rather than just produce society’s products by our labor while the direction of work and the administration of the products we create is left in the hands of the bankers and their politicians. What we produce through our labor should be a social product, produced for human need not profit for the few. The social product need not be the property of Steve Miller, the hatchet man for Delphi or his colleagues.

Ideas have a class base. In feudal times the dominant ideology was that the King was King by “Divine Right.” His position in society was given to him by God. It’s pretty clear who benefits from this viewpoint; certainly not the peasant in the fields. It’s hard to overthrow a despot who one believes is a despot by the grace of God, if you believe in God that is. Cromwell, the English farmer decided to test this philosophy: cut off the King’s head and see what happens. A new day was born.

It’s time for a new day.

(1) Financial Times 1-12-06

(2) Financial Times 1-9-06

(3) Financial Times 1-11-06

(4) Wall Street Journal 1-18-06


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