I know my constant harping on the “neoliberal consensus” puts me in real danger of never being considered “serious.” To the DC political, media, and think tank establishments, lamenting the neoliberal policy consensus that both political parties generally and tacitly accept is akin to being a sort of left-wing Bircher, as though it’s some kind of conspiracy theory.
Be that as it may, it simply cannot be ignored that the neoliberal worldview and policy approach undergirds our policy discourse in an essentialist way. It is almost impossible to find a public debate about policy in this country that isn’t constrained by the language and assumptions of neoliberalism. One of those is that The Market, if allowed to operate “perfectly,” will “appropriately” distribute goods and services (and particularly goods). That may be true for mathematical models, but it will never be the case in reality, because all markets are developed by social actors as a result of social processes inextricably tied to legal regimes, social mores, and our political history.
So look at Lee Fang’s great investigative piece on how Koch Industries, along with a host of others, use obscurantist financial instruments to manipulate the price of oil. As usual with such pieces, the arcane language of financial transaction can easily confound the uninitiated (i.e., the under educated, e.g., me):
However, the documents reveal that Koch is also participating in the unregulated derivatives markets as a financial player, buying and selling speculative products that are increasingly contributing to the skyrocketing price of oil. Excessive energy speculation today is at its highest levels ever, and even Goldman Sachs now admits that at least $27 of the price of crude oil is a result from reckless speculation rather than market fundamentals of supply and demand. Many experts interviewed by ThinkProgress argue that the figure is far higher, and out of control speculation has doubled the current price of crude oil.
Charles Koch, the CEO of Koch Industries who is worth a reported $22 billion, likes to call his business an example of something he describes as the “Science of Liberty.” In reality, his company’s deregulation crusade has contributed to rolling blackouts, consolidation and monopolies in financial markets, and economy-wrecking oil price spikes. In comments to the CFTC, the reform-minded nonprofit Better Markets noted that, “the history of these markets is a history of anti-competitive, self-interested, predatory conduct that serves the interest of the exclusive few at the expense of the many and the system as a whole.”
Of course, Koch Industries’ ability to drive up the cost the oil is based not on “market fundamentals” but only for their own gain, as a function of their comparable size and power in the economy. It was precisely a “freer” market that led directly to this irrational skewing of the price of oil, a staple commodity in the US economy. The complexity and invisibility of these processes free them from the normative market pressures that supposedly are hampered only by intrusive government regulation subject to the rent-seeking gangsters of conservative nightmares. And this will always be the case. So long as there is a state and some baseline level of regulation that even doctrinaire libertarians, much less neoliberals, agree is necessary, the powerful will use it for themselves. The Market can never and will never be “free” in reality, so the obsession with “freeing it” is merely agreeing to restrain those most able to manipulate it less and less.
And in the post-Reagan consumer capitalist economy, it will be always be in service of short term gains, which destabilize working class income and economic security.
Kudos to TP on their investigative work.