CSC-2 | Chapter 3 | The Pathologization of the Free Market (1)

The Pathologization of the Free Market

Servants of the ‘global free market’ programme militantly denounce whatever does not comply with its dictates. System stigmas of ‘communist’ or ‘militant’ lead to the persecution and possibly torture and death of those so labelled.1 All the while, what is called ‘the free market’ is a profound perversion of the local free market where community members exchange for healthy produce to enable their lives free of foreign and oligarchical money-sequencing.

The master term of the global system’s self-representation is nonetheless ‘the free market’ while it has become the opposite in fact and principle – transnational money-sequences of anything made to sell for a profit in uniform masses of corporate commodities are increasingly disabling rather than enabling of human and natural life-capacities. To ensure its self-multiplying growth, the system has reorganized societies’ resources, production and distribution across the planet to serve foreign corporate money-sequences called ‘investors’ with no life-need entering the money-sequencing calculus. An infallible ‘invisible hand’ deals out economic miracles one day and society meltdowns the next. The predatory money-sequences push stock markets to new highs and depression lows overnight, attack sovereign currencies and bonds, relentlessly push for end of government social spending, spike the price of grains for the poor, orchestrate wars while arming sides, and declare ‘freedom’ as their meaning – decoded, freedom from any accountability to life-requirements of any kind. All harms – worth countless trillions of dollars a year – are ‘externalities’.


Yet we find that whenever we go to any real free market, we move within an entirely different world with all of it kept out. We may be in central London or Paris, an Indian or African village, an older town of North America or Europe, a Latin American plaza or Far Eastern backstreet. Everywhere there is a real-life market, a living community gathering together to exchange what each needs. The con and carnie only emerge when life-needs are not involved. This real free market is not remotely like the oligopolist and transnational corporate system of today which calls itself ‘the market’. There is virtually nothing in common between this real free market we enjoy in the flesh, and the global corporate system which re-engineers governments and societies across borders to serve its multiplying money-sequences alone.

Recovering from the Social Amnesia of the Real Free Market

The free market we experience in real life-needs to be remembered to recover from the cultural amnesia within which we are now submerged. The real free market is made up of ordinary people meeting in a publicly owned space, some looking and some buying and almost as many displaying and selling what they have made or grown. The goods are generally foodstuffs, mostly fresh, often live, grown typically by their sellers, with personally made handicrafts on the open tables or ground in between. No-one force-plays with a sudden invasion or desertion of money demand. All are friendly and jovial as on a festival day. The buyers and sellers inquire and talk with one another of the health of their families, their shared community, and local affairs. Not a place in the real free market can be privately owned, and the quality of goods is not hidden under wraps or chemically engineered for false appearances.

Goods are sold without packaging or in recycled paper. The articles for sale serve a need, not artificially contrived and ad-stimulated wants. People walk within a community space without blacktop expressways and fossil-fuel machines walling their lives in. Creation of desire by the continuous operant conditioning of sex and power images does not deform minds. There is no monopolist or oligopolist distortion of supply or demand for the competition of alternatives is open. Every good sold, unless the market is being undermined, expresses the local region’s culture. Prices of different vendors are immediately comparable, directly negotiable with the owner, and hard sells cannot entrap buyers in the open public venue. Relations of community mediate everywhere, and no closed doors, big-box conditioning apparatuses and distant manipulation schemes by corporate head offices control transactions.

No non-contributing stock-owner can make a profit out of the real free market. Bank and credit cards do not structure the exchanges, nor appropriate a hidden margin from either vendor or buyer. Paper debts and interest charges cannot enter the producer-and-buyer-controlled process. No waste or pollution is generated by the direct transactions of individuals exchanging for what they need, and nothing is sold to harm people’s lives. Because no-one from outside the market can get rich from producing nothing for it, it is democratic. Most profoundly, the sequence of exchanges serves the growth of life on both sides, not the growth of money as an end in itself.

The real free market was a great advance of the community’s control of its own life when it was no longer subjugated to kings, lords or municipal monopolies for the privilege of its existence. It was an opening of liberty when ordinary individuals could freely exchange with each other in a public space to acquire the foods or crafts they chose to produce or buy. Money here was not a weapon to reduce others to instruments of bosses. Real money in the real free market is a universal medium that enables individuals to transact across differences of jobs and goods without incommensurables of worth standing in the way of their free exchange. What remains of a publicly established legal tender and credit for individual exchange among citizens in the global corporate system?

The real free market qualifies as ‘individual’, ‘free’ and ‘democratic’. While these properties are also claimed by the global corporate ‘market’, it is the opposite in nature, but not even socialist philosophers notice the contradiction. As for famed ‘free market’ theorists like Milton Friedman and Robert Nozick, all trade on equating these opposites as the same. The reigning fallacy of equivocation would invite our hilarity if it were not so indoctrinated into the corporate culture as the starting point of social thought.

Table 3.1 identifies these oppositions, but not their consequences to living people. We move to these as the unmasking of the corporate system proceeds. But we can see from this summary figure of structural contrasts that the real free market and the ‘global market’ are contradictory in principle. Not even the exchange medium is the same any more than pocket money is the same as interest-and-financial-charge-bearing instruments without cash reserves – the drive-wheel of the global cancer system.

The question, then, arises again. How could these opposed forms of life be collapsed into identity without the notice of economists, political or social theorists, or even logicians? How could they be so pervasively confused that no terms in the technical literatures of the social sciences distinguish between them? How could such an equation of contraries so control the world that public policy decisions continue everywhere on the basis of what is, in effect, a deep-structural lie across cultures?

Money-Sequencing to More versus Exchanging for Life-Goods

On the basis of this instituted equation of opposites begins the failure of social immune system. Nowhere is this more momentous than in the social incapacity to recognize the malignant mutations developing within the nature and use of money itself.

In fact, money is a civil commons of shared belief in a universal exchange value protected by public authority. But money-sequencers and criminals seek only to have ever more of its demand by various forms of non-legal tender. As we have seen in Chapter 1, big banks now exponentially leverage money demand beyond legal tender by compound-interest debt-creation without limit and casino-speculations with money they do not have – even attacking sovereign currencies and bonds with their self-coined notes. The exchange medium itself is thus debased by the transnational private money-sequence system. Yet as long as demand in the global market can be taken away from workers and public sectors at the same time by created debt-money multiplying itself, there is not a problem of inflation – the great mutation of 30 years. Inflation is reduced by reducing the money going to governments and everyone else – the innermost wheel of the cancer system.

Few notice the connections even after the global financial meltdown of 2008 when the scheme collapsed by the hollowing out of its victims. Yet the system displacement of the real economy had been so totalized that few could see it. Throughout, the mass media, the mainstream academy, school texts, and professional economic models continued to blinker out the foundational false equation underpinning the ever-growing global disorder.

The equation of these opposite forms of production and exchange is a life-and-death confusion. Non-living corporations are conceived as human individuals. Desire to turn money into more money for unknown stockholders in nameless places is represented as personal production and service to fellow citizens. Consumers who are mass-conditioned under their conscious awareness are portrayed as freely choosing individuals. Continent-wide machine extractions of the world’s natural resources, pollutive mass-manufacturing and throwaway packages are imaged as home-spun market offerings for the local community. Junk and unneeded commodities are made to appear as necessary for vital life as food to eat. Faceless corporate bureaucracies structured to avoid the liability of their stock holders are represented as intimate and caring family friends bearing the responsibility of the larger society. The exploited mass-labour of others is transformed into the manufacture of the corporation as ‘the producer’. The very concept of ‘the global marketplace’ is made into a proper name when all of its primary agents and products are distinguished by the fact that they have no place that they are in, but are borderless operations and transactions directed from cyberspace. At the ultimate core of the system mutation is the multiplication of ever more borderlessly life-blind and unaccountable money-sequences depredating life-systems at all levels but represented as ‘ever-increasing wealth’.

Table 3.1 The real free market versus the corporate money-sequence system
Real free market  Corporate system
Investor Direct producer Money investor
Product Organic food and handicrafts Any commodity that sells
Labour contribution Labour of those who own and sell Purchased labour of unrelated others
Methods of production Skill-intensive integrated labour Machine-intensive division of labour
Seller Producer and / or associates Separate retailer
Buyer Local individuals Global mass market
Product information Personal knowledge Media commercial
Medium of exchange Legal tender Private money-sequence system
Source of packaging Recycled wrapping Extraction of natural resources
Nature of demand Natural need Stimulated want
Price determination Local decision Fixed by central office
Relation between producer and buyer Face to face None but ads
Site of transaction Open community meeting place Segregated private property
Relation to local culture Expression of its climate and arts None or contrived
Surplus value recipient Producer Non-producer
Expenditure of revenues  In local community By corporate head office

Bear in mind here that the not-self of the medical model of disease only succeeds in its invasion of the host body when the self of the body’s immune system does not recognize it. This is the model whereby oncologists and other disease diagnosticians distinguish between a pathogenic invasion and the life-host it invades. At the social level of life-organization the same principle holds, but the pathogenic invasion is not recognized or responded to because its mutations are blocked out.


Adam Smith is universally accepted as the founder of the free market paradigm, and global system advocates, defenders, corporate spokesmen, and economists standardly presuppose his ‘free market’ ideal. Even high theory assumes a just-so model of individual traders seeking to maximize their assets as ‘the rational man’ with no-one observing of the basic mutations identified in Table 3.1. Rejecting Adam Smith’s free market principles is no more done than evolutionary biologists repudiate Darwin’s theory of natural selection. ‘Classical economic theory’ is grounded on Smith’s free market doctrine, and ‘neo-classical theory’ presupposes it. Any normal ‘free market’ society, in turn, takes its economic counsel from neo-classical economics. The lineage is simply assumed although it ends in the equation of life-and-death opposites of social and political regulation.

Let us begin with the first basic axiom of market theory and practice, the principle that the pursuit of one’s private interests in the market promotes the public good. Smith put it this way:

Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of society, which he has in view. But the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to society … By directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and in this, as in many other cases, he is led by an invisible hand to promote an end which was no part of his intention.2

A master principle of value and causality has been inferred from this canonical text, and it is the regulating first principle of the global system. No-one has put it more straightforwardly than Milton Friedman, the global system’s first mullah. As he has famously said: ‘The one and only responsibility of business is to make as much money for stockholders as possible – The doctrine of social responsibility [for business] is a fundamentally subversive doctrine in a free society.’3 In the global system today, all doubt of this ruling principle of ‘the free market’ and ‘the free society’ is, accordingly, repudiated as subversive resentment. But when Adam Smith introduced his concept, it was not a money-sequence formula violating life-requirements as an absolutist principle of borderless corporate growth but the contrary.

Smith supposed a set of powerfully qualifying conditions to his principle of coincidence for investor and market gain. The market and its investors were assumed to have the following characteristics before the principle could apply. Smith did not assert these conditions for this specific principle, which has been blown far out of proportion to the one paragraph of text in which he expressed it. The conditions which follow were far more central to his theory, and they qualify all that he says in the Wealth of Nations.

First, there could be no private monopoly or oligopoly of production or distribution. Smith deplored monopoly and oligopoly above all – the Royal Charters of his day – because they undermined the normative ideal of the market: independent producers and sellers competing to undersell one another in a condition of equal inability to manipulate market supply, demand or price.4 What Smith above all deplored, however, has largely come to pass in another form. Monopoly and oligopoly is not instituted by royal proclamation, but by processes of government-subsidized transnational corporations which by 1993 controlled market sales of over 70 per cent of market durables, 60 per cent of cars and trucks, airlines and aerospace (the latter so subsidized by governments that they are dependent on it for most of their capital formation), almost 60 per cent of electronic components and steel, and nearly 50 per cent of oil, computers, mass media and chemicals.5

Second, because of the unavoidable inconvenience, cost and insecurity of investing in foreign countries, Smith took it for granted that domestic capital would not migrate to foreign nations so long as the investor was able to receive ‘ordinary’ or ‘not a great deal less than the ordinary profits of stock’.6 Again, what Smith assumed as a natural disposition to retain investment in the host society has turned out to be the opposite in the global market. Small margins of higher returns across the globe propel tidal capital outflows from societies overnight where it has been earned with no more identification or commitment to the home society than one not living in it, even if the investment elsewhere leaves the majority of the society plunged into poverty. Indeed, the ‘fiduciary duty to stockholders to maximize returns’ has been absolutized as sole and final authority, thereby ruling out the minimal loyalty to one’s country that Smith took for granted.

Third, Smith specified that investment which is ‘productive’ or ‘wealth creating’, the only kind of investment which he supported, must manufacture ‘some particular subject or vendible commodity which lasts for some time at least after that labour is past’.7 Note that Smith confines his idea of a market commodity to what has some lasting value and is made by human labour. As we will see in more detail ahead, this condition too has been reversed by the global market system. Commodities have an average life of 42 days, and most investment is in financial vehicles with no labour input and with no production of material commodity at all.

Fourth, Smith explicitly stated that ‘the sole use of money is to circulate consumable goods, provisions, materials and finished work’, thereby ruling out stock, bond and currency speculations where money is invested and multiplied as an end in itself in decoupled, reiterating circuits that circulate nothing of use or productive work whatever.8 In this movement from money as a medium of exchange between people’s work, their means of production and their consumables to money-demand as the beginning, middle and end of delinked sequences of self-multiplication with no committed function to production or use lies the pathway of mutation to which we devote much of Chapter 3.

Fifth, Smith strongly stipulated that capital must be reinvested in productive jobs, or else it is ‘perverted from its proper destination’. As Smith put this foundational principle in fuller context (my emphasis): ‘No part of private capital … can ever afterwards be employed to maintain any but productive hands, without an evident loss to the person who perverts it from its proper destination. By diminishing the funds destined for the employment of productive labour, [such an investor] necessarily diminishes, so far as it depends upon him, the value of the annual produce of the land and labour of the whole country, tending not only to beggar himself but to impoverish the country.’9 There is no principle more emphatically specified by Adam Smith, and no principle more completely in contradiction with the global market’s systemic disemployment of productive workers by downsizing, job-shedding, and public sector dismantling as an automatized choice-path.

Sixth, government taxation must fall on citizens ‘in proportion to their respective abilities’ [to pay], and on those to whom ‘the benefit is confined’.10

Flat taxation, taxation of the majority to pay for government services serving only transnational investors and corporations, competitive lowering of corporate taxation across the world, off-shore tax havens for the rich, and increasing reduction of income taxes on the wealthy for equal consumption taxes on poorer income groups are all dominant tendencies of the global market, and all clearly invert Smith’s principle of fair taxation.

Seventh, ‘no two characters seem more inconsistent than those of trader and sovereign – the mean rapacity, the monopolizing spirit of merchants and manufacturers neither are, nor ought to be, the rulers of mankind’.11 Smith thus implicitly prescribes against what has today become normalized – the rule of society by ‘business methods’ of ‘efficiency’ and ‘productivity’ which mean no more than the reduction of all money inputs to interests other than business so as to maximize money outputs to business, a law of partiality and greed ruling society with no limit recognized to its spheres of extension and appropriation.

In the contemporary reality of the global system now re-engineering all societies to its prescriptions, we may conclude, not one of these conditions Smith specified or assumed as ‘the free market’ is adhered to by global system theory or practice. Rather every one of Smith’s classical principles of the free market has been turned into its effective opposite.

Smith’s famed principle of the invisible hand whereby capital investors’ private profit promotes the public good has been, in these ways, stripped of every condition and qualification upon which it was based. In its place has emerged an unconditional absolute – that money-profit maximization is a final good in itself even as it annihilates the founding doctrine’s provisos of social and productive accountability. Yet Smith’s market model remains a ritual mask over an unrecognized cancer system – self-multiplying money-sequences committed to no life-host invading every level of life-organization and cumulatively depleting, polluting, wasting and destroying them.


Let us advance from the traditional free market and Adam Smith’s model to the ‘neo-classical’ concept of ‘the free market’ expressed by its most prominent institutional advocate, F.A. Hayek. Let us see whether the principles of freedom espoused here are what they seem, or again mask their opposite underneath surface illusion. Hayek’s rhetoric of freedom has – like all other schools of contemporary market-capitalist doctrine – no referent whatever except the freedom of private money demand.12

This deep-structural movement in the meaning of ‘freedom’, from the apparent universality of benefit we find in the exchanges among equals in the real-life marketplace to increasingly narrow partiality and debasement of sense, is allowed to occur by a combination of conceptualization decoupled from reality, and the simultaneous massive change of reality within the concept’s permissive licence. Consider a simplified example. If I say to you, ‘We are both free to disagree, and that is our shared principle of freedom’, you may understandably concur. As long as both of our lives are such as to enable us both to speak, this rhetorical principle may suffice. But if I own all that can broadcast and reproduce speech, and you work a twelve-hour day with a family you can barely feed, then this principle of our mutual freedom which has no qualification of definition or circumstantial substance to keep its bearings can mislead us into thinking we are in fact both free when, in truth, you are silenced and I am mega-volumed by our actual conditions of life.

If then these conditions of life become patterned across time and social populations, and the owners of the conditions of public speech keep asserting ‘we all have the right and freedom to speak’, while very few in fact have the means or conditions to do so, then the idea of equal freedom to speak has been deformed to stand for what is in effect the opposite. This is the underlying pattern of all of the principles of ‘freedom’ declared in the global capitalist system. Hayek’s canonical definition of ‘the free market’ is, however, at least a definition rather than only a pervasive ruling slogan. Hayek writes:

Parties in the market should be free to buy and sell at any price at which they can find a partner to the transaction – free to produce, buy and sell anything that can be produced or sold at all.13

As this formula emphasizes, the argument for this system is the freedom of ‘parties’ from external control in exchange to which they agree. Because this freedom applies to the basic spheres of people’s lives – what they eat, drink, live in, travel by, read, are entertained by, and so on – it appears on the face of it to be the most important and fundamental realm of freedom there can be. This is the great selling point of the doctrine.

But let us examine the argument more carefully. As we do so, let us keep a question before us. Are any of the following problems of the free market ever raised in the mass media, or in economics courses? If not, why not?

Freedom to Consume

Let us assume, that agents transacting in the corporate global market are free to buy or not to buy goods for sale – although they are not in the cases of relatively harmless as well as harmful prohibited substances. Right away the claim is falsified by reality which Hayek does not acknowledge – the selective blinkering out which characterizes propagandist claims. More deeply, with the mutations of the global ‘market system’ this most basic freedom of the traditional and classical market paradigm is not clear even with lawful choices of purchase and sale. A Massachusetts law instituting the choice of the government not to buy products such as oil from businesses collaborating with the military dictatorship of Burma (on the grounds that its agents were criminals under law for crimes against humanity) was prohibited by World Trade Organization decree. The Massachusetts government was charged with violation of World Trade Organization regulation for ‘discrimination’ on the basis of its ‘process of production’ which is expressly prohibited in this alleged ‘free market’.14 You cannot refuse to buy it.

Even if we wave aside all such contradictions of the claim of ‘freedom of the consumer’ in the global corporate market, there are far more basic unfreedoms in its name. If consumers do not have the money to pay for the goods they need to live, they cannot buy them, and may thus be stare or worse. In this ‘free market’, therefore, those who do not have enough money to pay for what they require to live have no right to food or shelter or any other required means of life. To call this ‘freedom’ when an increasing number of our society and the world approaching a third are without is therefore absurd. Freedom cannot exist for those with no means to act freely.

It is worthwhile considering the profile of money-demand and life-need which has emerged within global market conditions. A total of 1.3 billion people of the world have less than a dollar a day to live on, 20 per cent of all people will die before 40 on this account, and a rising 100 million people in the most developed countries live below the absolute poverty line.15 To declare the ‘freedom of the consumer’ in such life-conditions, and to declare it as the acme of the global system’s freedom which ‘uplifts all peoples of the world to prosperity’, discloses the mendacious programme of the doctrine.

The reason the received market paradigm cannot recognize such problems is that under its rules, life-needs without money to pay do not exist. They count for nothing. This is why developed societies introduced government interventions in the market over generations prior to the global system to provide government assistance to those who were without the money, mostly children of underemployed parents, to have enough life-goods to survive. But all such provisions have been under unremitting attack for over 20 years and are now stripped in the European Union and the US themselves. ‘Freedom’ here is only the freedom of those who have enough money to demand what they want with no limit of money-sequencing to more. For all those who do not possess enough money to be alive and well, there is no freedom even to eat. They do not have the right to exist as human, but are rather condemned to ‘a living hell’.16 This is the nature of the cancer system in motion.

Freedom of the Seller

People who must work most of their active hours to earn enough money to live if they have jobs must sell these vital hours of life in exchange for wages and salaries. The sale of their work is all they have to sell in the corporate market – as distinguished from the traditional free market where exchangers are independent producers, or the professions which are subjugated to the same private money-sequence rule. The labour buyers, in turn, having paid for others’ work, have the right of private property in it to prescribe everything they do, and how they do it, to multiply private money-sequences.

But to be told what to do and how to do it during most of your active waking hours cannot be meaningfully called ‘freedom’ for over 90 per cent of the world. It is for this reason that Marx (and Abraham Lincoln) called such a condition of life ‘wage slavery’. Most of one’s active life is owned by another. But this is preferable to starvation or crime – the ‘freedom of the seller’ for the 99 per cent. The lot of sellers of their work who can find no buyer are increasingly the lot of even developed world peoples with endless slashing of social life-support systems now returning them to the past of life-ruin.

Thus the 99 per cent become in fact ever less free the more technological devices replace human work; the more sellers outnumber buyers of labour; the more corporate employers can hire starvation-wage work elsewhere; the more that there are no alternative means of employment or life-support in public service; and the more that unions, minimum-wage laws and other labour-protective institutions are reduced and abolished.17

Freedom of the Producer

Because those who must sell their work or service to live must normally obey the orders of their employer most of their active hours, they do not have freedom as producers – what human beings want and need as human. Who, then, is free? Artists of all kinds seem to, but they must create what buyers with enough money will purchase and, therefore, must shape their products so as to attract and not to offend them. Their freedom as producers is thus limited to a small percentage of society who are able and willing to pay for their artistic creations – what Henry Thoreau called ‘a site of humiliation’.

The still smaller minority who have enough capital to employ others have more freedom than most, but in the global system even they are compelled by its laws to invest only in economic activities that will net them ever more money ‘to remain competitive’. This means they must relate to other people who work for them as means to more money, their ‘fiduciary duty to stockholders’. If they act otherwise, they are being unjust by this paradigm’s rules.

Doctors and professors are free or self-governing in their work lives. But even they remain free only to the extent that, what they do for others is not for ever more money as regulating objective – in which case they cease to serve their vocation. Yet in fact doctors in the US are increasingly piece-workers in ‘health maintenance organizations’ – large transnational corporations – where every diagnosis, finding and treatment is time-and cost-prescribed to maximize the HMO’s private money-sequences. Their independent professional judgement and commitment to the health of their patients as overriding is displaced by financial formulae whose regulating code is to maximize money returns.

In all, then, we are thus constrained to face the opposite conclusion of what corporate market advocates claim. People are only free in their work when they are not bound by its rules of production.

Freedom from Government Interference

Perhaps the deepest conviction of believers in the so-called ‘global free market’ is that its ‘open competition ensures freedom from government’. Yet in fact transnational producers require increasingly expensive and round-the-clock nanny-state support including tailor-made power, transport and services for privately owned and sold commodities, school training and natural resources and bandwidths at little or no cost, police and armed forces guarding foreign and domestic assets and exchanges across borders, myriad services, offices and personnel to continuously monitor, promote, and protect private business interests. Add this to the ever-rising vast tax, deregulation and handout subsidies in the countless trillions over time, and we recognize this transnational corporate system is certainly free in the sense of free of cost for its private money-sequences riding on captive governments and their victim peoples.18 But it is a cancerous force for host societies the more it not only free-rides with ever lower taxes and obligations, but hollows out, wastes and pollutes societies and their resources as they shrink across the world.

The idea of the global corporate system being ‘free of government’ is so contrary to fact as to be fantastic to anyone not programmed by its incantations. Global system proponents really mean something that is not distinguished and is the opposite in moral sense. They mean ‘freedom from government’ that is not profitable to transnational corporate profits and imposes costs on the public. That is why they never talk about reducing government interventions that benefit these interests (for example, more police, weapons, prisons, roads, free employee training or public resource giveaways), but only demand reductions of public spending that benefits people’s lives (social security and environmental and safety regulations to begin). Systematic assault on life-support systems to multiply private corporate money-sequences is the nature of the cancer system. It demands ever less for people and their life-conditions and ever more for private money-sequences.19

Consider the historical background. Under pressures of workers, democratic accountability and human rights, governments had for a century come to serve the common life-interest of society from universal education and health to instituted civil rights to income security programmes. But it is these very life-bases which are slashed at every level. The true vocation of government – to protect and enable the lives of its citizens and their life-support systems – is attacked wherever it does not make money for private corporations.

More exactly, consider what has happened over 30 years: to the hours of the working day and week (ever longer for those who have jobs, not shorter by labour-saving technology); to safety standards and environmental regulations for factories and businesses (ever-fewer enforcement officers, reduction rather than development of life-standards, and abdication to corporate control); to employees’ ability to organize in workers’ unions (militantly blocked by the biggest employers in the global market like Walmart, and increasingly suspended at will in the public sector and strategic private domains); to unemployment insurance and income security for those without jobs (non-stop stripping as unemployment and underemployment increases); to universal pensions and health care (massive privatization to insurance conglomerates and stock markets); to higher education for all qualified (ever more marketized to debt-enslave students to private banks); to libraries and public broadcasting (continuously reduced, chopped and privatized by successive budgets).

Keep in mind that not one of these life-serving social infrastructures can be provided by private-profit investment, and that every one has been historically opposed by business (for example, by killing worker and community organizers in the 1930s’ US or 1980s’ Central America, or again across continents today). While all require government funding and support, not one is protected by the ‘New World Order’ within which all are dismantled. ‘Freedom from government’ has come to mean, in short, the reversal of civilization.

Lower Costs

The argument that producers and sellers ‘must compete to produce and sell their goods at the lowest price‘ is the original argument of Adam Smith for ‘the wealth of nations’ – the competitive efficiency argument. But when transnational corporations and banks seek by law and intent only to multiply money-sequences in as great volume and velocity as possible with no life-standards, the efficiency claim comes undone. For the costs only go down for the transnational corporations which externalize the costs onto third parties, society and the environment in accumulative ruin of social and natural life-support systems, human relations, and organic health – as we saw in Chapter 1. At the same time, home markets and resources are thrown open to transnational corporations with no conditions attached to prevent this depredatory macro pattern, and no life-capital accounting to even recognize it. To lock in this cost-externalization regime, all ‘performance requirements’ of job maintenance and creation, technology transfer, resource sustainability, or profit reinvestment are prohibited by contemporary trade decrees, while ‘discrimination’ by host societies against the ‘process’ of production of commodities allowed into domestic markets is forbidden. Released in this way from obligations to any life-requirements, transnational corporations can lower their costs of production by relocating for lower costs in places where there are no pollution controls, no minimum wages, no workers’ benefits, no health and safety standards, and no government taxes to pay for any of them.

Armed with the new right to sell their products back to host societies, they can bleed both producing and buying populations at the same time. That is why under new international ‘free trade’ agreements private corporations and businesses have increasingly demanded that governments deregulate and lower taxes so that they are not obliged to pay the costs of sustaining the life of host-societies or their environments. In ‘free trade zones’ like the Maquiladora zones on the border between Mexico and the United States, wages are a fraction of what they are in Canada and the US, effective pollution controls are non-existent, taxes for public health and education have been abolished, and the biggest free trade is in narcotics. The efficiency that exists here is the lower ratio of costs to revenues for transnational marketers, period. All costs to life are excluded a priori – to labour, to environments, to societies. In fact, unemployment and loss of livelihood is a benefit to transnational businesses because it lowers the price of labour and expectations of a human life. Life-requirements of any kind do not figure in at any level. As we have seen in even Europe, whose countries evolved into the most life-protected in the world by social legislation, unemployment and life-insecurity have only increased over 20 years towards the no-bottom this system seeks.

What is a disaster for people’s lives, ratcheting-down their incomes or loss of their livelihoods, is a monetary gain for transnational banks and corporations up to the point the life-host collapse. There is no need to worry about workers’ rebellions or uprisings as unemployment grows and wages and salaries drop. All that is required is to move on to the next while vulturing all possible from the collapsed societies left behind. There are always vast supplies of ‘free’ labour without supports, and a multiplying functionless and borderless rich to sell luxuries and stocks to in ever more of the cancer spiral down. Societies are warned ever step that they ‘must adapt to the ‘global market competition’ – with that meaning never questioned.

Low costs for every life and life-support system thus continue down as ‘comparative advantage’ in every case until another captive state goes lower society ‘to compete’. Even the comparative advantage does not, in fact, rebound to the home country in this ‘race to the bottom’, or even to the richest country seemingly winning for a decade or so.20 It goes only to the cost-reducing transnational money-sequences which have no commitment to any life-host of country, people, environment or the planet itself.

It is only by government or other intervention that societies can prevent their standards of life falling to the lowest common denominator, which itself can keep falling to ever lower levels. But such minimum standards are protected nowhere in the system now with the exception of the European Union to which the corporate and bank demands never stop to remove these ‘labour inflexibilities’ and ‘inefficient cost barriers to investment’ – so that in spring 2012, for example, Spain has a 50 per cent youth unemployment rate, and no pension, union or benefit is safe in Europe. Life-serving standards are a liability in the global corporate system. There are thousands of pages of rules to protect corporate and business rights, over 20,000 pages of them in the General Agreement on Tariffs and Trade (GATT), but no rules protect human rights or the quality of the environment. At the same time small producers and businesses without economies of scale, transnational markets, and policy control of captive states are perpetually on the verge of ruin. It was for this reason, for example, that the small Chiapas producers of corn in southern Mexico began a rebellion against ‘the death sentence of NAFTA’ (North American Free Trade Agreement) on the day of its inception in January 1994 – again lost in the memory hole of the system.

Biodiversity in general is attacked by the nature of the system. From factory farming to media products, ever fewer transnational conglomerates monopolize production and distribution as ‘more for less’ extends into people’s brain circuits themselves. But the costs only increase for organic, ecological and social life – ever-increasing life-poverty, noise, pollutions, unemployment, ill-health and environmental degradation following directly from cost reduction for private money possessors and sequencers alone. None compute to the ruling private money-sequence system dominated ever fewer government-controlling corporations.21 Yet it is difficult to think of even an armed invasion more systematically invading and despoiling human and natural lives and life-support systems. Commodities may become marginally less expensive, but they are increasingly life-disabling in process as the air we breathe, the sun we move in, the social space around us and the security of children’s futures deteriorate.

On closer examination, in short, we see that the argument for lower costs in ‘the global market’, its ultimate argument of efficiency, is the opposite of the truth from the standpoint of human and planetary life. If we review what this paradigm’s concept of costs exclude, we find that there is a unifying principle. Life-costs and loss have no value. In truth, the destruction of life and life-goods nets rising advantage because each good lost in the community or nature is at the same time a new opportunity for priced commodities – from pharmaceuticals to treat people’s loss of peace of mind to travel industries to substitute for dead local environments.

The Free Market as Democracy

The most tirelessly asserted claim argument for the putative ‘global market’ is that it ‘promotes democracy’. So standard is this view that heads of state deploy it on a routine basis to answer criticism of economic partnering with mass-murderous dictatorships. There is in fact no evidence to substantiate the causal claim, but overwhelming evidence to refute it. For example, when societies like Guatemala, Iran, Indonesia, Chile, Mozambique, Angola and Nicaragua were returned to ‘the free market fold’ by military coups or civil wars plotted and financed by the military and the CIA of the world’s leading corporate state between 1954 and 1988, which one of these societies experienced a growth of democracy afterwards?

Consider the case of Nicaragua. What follows is a brief third-party report of the outcome in terms of increased democracy after US-armed and financed ‘freedom fighters’ succeeded in marketizing Nicaragua.

Popular organizations in Nicaragua are struggling to find solutions to their worsening economic and social situation. Poverty has increased dramatically, and now affects over 70% of the population. Unemployment stands at 60%, while 80% of children do not finish primary school, and deaths from malnutrition have skyrocketed. Hunger, practically unknown throughout the1980s is widespread.22

Never in fact has conversion to corporate-market rule by armed-force intervention done anything but irreversibly ruin the majority’s lives from Nicaragua to Yugoslavia to Iraq to Libya. In fact, the real cause has been to reverse these societies’ built alternative to foreign corporate control of natural resources, markets and strategic sites in the full view of other countries. This is not to deny that a real free market can, in fact, ‘promote democracy’. Adam Smith’s market paradigm was later directed against the royal monopolies and self-serving business lobbies of his day which he judged capable of any ‘mean rapacity’ and ‘with an interest to deceive’. The evidence is overwhelming that, in contrast, the global corporate market works systematically to de-democratize society in every life-function to turn them into private corporate money-sequences. The law of conversion is straightforward, but taboo to name: to open all domestic markets, natural resources, built infrastructures and labour pools of all societies of the world to foreign transnational control without the barrier of self-determining governments and peoples in the way.

In this meta-programme, societies must compete harder to be effective means of transnational investment, production and distribution, and not obstruct any ‘free flow of capital and goods’ by ‘protectionist’ or other obstacles, of which effective democracy is the most obdurate. That is why the Trilateral Commission founded in 1973 and composed of the world’s leading corporate CEOs, past and future US Presidents and Harvard academics, frankly announced in a task-force paper entitled ‘The Crisis of Democracy’ prior to its initiation of the US–Canada ‘Free Trade Agreement’, that there was an ‘excess of democracy’ in the Western world. It argued that what was needed was the ‘apathy and non-involvement’ of a ‘governable’ democracy, and more recognition of ‘the inescapable attributes of government’ – ‘the legitimacy of hierarchy, coercion, discipline, secrecy and deception’.23

The same global market mind-set argued the case more explicitly 20 years later. The research voice of transnational business in Canada, the Fraser Institute, publicly asserted in defence of more ‘free trade’ that ‘a trade deal simply limits the extent to which a government can respond to its citizens’.24

It is worth returning here to the market theory’s founder, Adam Smith, on the connection between democracy and the market. Smith never presumed to assert the non-sequitur claim that the free market promoted democracy. He certainly exceeded the democratic commitment of the current global system in his foundational opposition to oligopoly-controlled markets and commitment to investment in productive labour and goods. But he openly regarded ‘the race of workers’ as ‘inferior’, and asserted that the lives of their children were properly left without food when the supply of labour exceeded demand.25 The causal relation now declared between the market and democracy is not to be found in Adam Smith or any other economist until the mass conditioning techniques of engineering consent developed to a pervasive art of control and deception. Its mass-media vehicles are precisely not accountable to any interest but more money gains. Actual democracy in the common life-interest is the greatest possible danger to a borderless oligopolist regime which seeks unconditional access to every society’s local markets, resources and jobs for its own foreign money-sequences. No society with democratic accountability of its leadership would, or has, ever given away all its bases of wealth free of cost or performance requirement as these transnational regimes prescribe with few knowing it.

In a true free market, no producer or seller is able to affect the supply or demand, whereas the oligopolist control of supply in the global market is linked to the same corporate oligopoly and control of demand at the same time. What is fact rules is not the invisible hand, but a system of pervasive operant conditioning of buyers by dominant corporations not available to other sellers and of regulatory capture, subsidies and contracts other producers cannot access. Adam Smith further observed that corporations (or ‘joint stock companies’ as they were then called) are anti-democratic by their nature and fit solely for ‘uniformity of method … of little or no variation’.26

Presciently, the reason Adam Smith thought corporations good only for homogeneous tasks was that he observed them to be effective solely at the routine, non-productive work of financial accounting – the very operation that has mutated to the socially ruinous forms expressed in the 2008 economic collapse of the developed world. The corporate ‘financialization’ of the borderless global economy has turned an already top-down command system into a life-attacking money-sequence system with no interest but the money-demand multiplication of its commanders. It is as profoundly anti-democratic a form of rule as has ever exited – Smith’s mindless monolith with no productive function at all and prepared to sacrifice whole societies to their having limitlessly more every year. All the while even legal liability for damages to social hosts and peoples is excluded by limited-liability structure under law and new transnational treaty rights to override any democratic legislation reducing their expected profits. As for ‘accountability to shareholders’, they vote by shares owned and well under 10 per cent of any population has enough shares to purchase anything.

We need to bear in mind that 98 per cent of all foreign direct investment for which governments compete as a first priority is by transnational corporations, and that over 80 per cent of this foreign investment is for takeover of domestic firms.27 We need also to bear in mind that over 80 per cent of all world trade is controlled by the same transnational corporations, and that over 80 per cent of all land cultivated for export is similarly controlled.28 All this was true before 2000 after which the very reversal of the democratic achievements of a centuries have become ever more cancerous in effects, as Chapter 1 has shown. If we look at the matter from the individual standpoint, and count dollars as votes – the model implied by ‘the market = democracy’ equation, the democratic reversal is worse. By the turn of the millennium, according to United States Congressional statistics, the top 1 per cent of the population controlled more dollar votes of private wealth than the bottom 90 per cent of the society.29 This is a democracy, then, where 1 per cent have more voting power than 90 per cent or, today, as the saying goes, more than the 99 per cent. Famous economist Peter Drucker simply responds: ‘Every country and every society must learn that the first question is not is this measure desirable, but what will be the impact on the country’s competitive position in the world economy?’30 Deconstructed, this sentence means, ‘Democracy or other desirable states of affairs do not rank. Not even the life of peoples and planets. What ranks is reducing costs and increasing revenues for transnational corporate money-sequences to become maximally more.’

The more unequal the possession of wealth is, the more people there are without the money to buy what they need, the more that unpriced goods of the community and nature are expropriated or destroyed, the more unfreedom and lack of democracy there in fact are. The cancer system is implicit, but no public communication allows the diagnosis.31


Table of Contents



  1. In testimony given to the War Crimes and Crimes against Humanity Tribunal at the 1989 World Summit in Toronto at which I was Chair of Jurists, a former El Salvador death-squad officer testified: ‘If we were told that someone was a communist or subversive, then normally we would eliminate that person’ (Toronto, June 11, 1988). For an analysis of the relationship between anti-communism and global market ideology and practice, see my ‘Fascism and Neo-Conservatism: Is There a Difference?’ Praxis International, 4, No. 1 (1984), 7–24.

  2. Adam Smith, ‘Of Restraints Upon Imports From Foreign Countries of Such Goods As Can Be Produced At Home’, Book IV, Chapter II, An Inquiry into the Nature and Understanding of the Wealth of Nations, New York: F. Collier and Son, 1909, pp. 351–2.

  3. Milton Friedman, ‘The Social Responsibility of Business is to Increase its Profits’, New York Times Magazine, September 13, 1970.

  4. Adam Smith, ‘Of the Agricultural Systems’, Book IV, Chapter IX, Wealth of Nations, p. 46.

  5. ‘A Global Game of Monopoly’, The Economist, March 27, 1993, p. 17.

  6. Adam Smith, ‘Of the Extraordinary Restraints on the Importation of Goods’, Book IV, Chapter III, Wealth of Nations, p. 352.

  7. Adam Smith, ‘Of the Accumulation of Capital’, Book II, Chapter III, Wealth of Nations, p. 272.

  8. Ibid, p. 280.

  9. Ibid, p. 279.

  10. Adam Smith, ‘Of the Expenses of the Sovereign or Commonwealth’, Book V, Chapter I, Wealth of Nations, p. 487.

  11. Smith, ‘Of the Extraordinary Restraints on the Importation of Goods’, p. 383.

  12. The logic of this infrastructural precipitation is first set into motion by John Locke’s Second Treatise on Government, cited as the source of Adam Smith’s own view of private property in Wealth of Nations. Locke provides a justification of private property – since canonical – which imperceptibly shifts from mixing one’s labour, non-waste and good enough left over for others to private moneydemand which has no such limits. See my critique in Value Wars, London: Pluto Press, 2002, pp. 65–72.

  13. Friedrich Hayek, The Road To Serfdom, Chicago: University of Chicago Press, 1944, p. 37.

  14. ‘World Trade Threatens Massachusetts’, Earth Island Journal (Fall 1997), 19.

  15. United Nations Development Report 1997, cited by Victoria Brittain and Larry Elliott, ‘World’s Poor Lose Out to Corporations’, Guardian Weekly, June 22, 1977.

  16. Cited by Pierre Sane, Secretary-General of Amnesty International, ‘Amnesty’s Report Card From Hell’, Globe and Mail, December 10, 1993, p. A21.

  17. As an indicator of the effects of the global system on the ‘freedom of the seller’, consider the following facts about two very differently developed societies under the impact of the private transnational money-sequence dictatorship: ‘In the first three years of the US-Canada Free Trade Agreement, Canada lost 1.4 million jobs, including 500,000 manufacturing jobs, over 25% of the entire manufacturing sector. In Mexico, the [current] average hourly wage paid by US corporations is 63 cents. In the last ten years, as American and other foreign corporations moved into Mexico [and into Free Trade Zones], Mexican wages have been driven down by 60%.’ Citizens Concerned About Free Trade, Saskatoon, Summer 1994.

  18. Government interventions to subsidize corporations in the home of the ‘global free market’, the United States, is systemic and vast. Sovereign publics own one-third of the United States and over four-fifths of Canada, but corporations control their rich mineral resources of timber, oil, and gas for their exclusive profit, which may be removed from the host society and invested anywhere else at will. At the same time, taxpayers furnish the money for roads and other infrastructure to enable these corporations to clear-cut, extract, and deplete publicly owned resources for a fraction of their market worth. The public also owns the airwaves used to transmit television, radio, and other communications. But private corporations control these as well, at little cost and with no accountability to the public interest. (The figures here are drawn from Ralph Nader, ‘Stop Americanizing Canadian Healthcare’, CCPA Monitor (February 1996), 17.)

  19. The investigative study by Mark Zepezauer and Arthur Naiman, Take the Rich Off Welfare, Tucson Arizona: Odonian Press, 1997, calculates an annual direct monetary subsidy to large corporations of $448 billion a year. These public handouts occur as guaranteed programmes of assistance to single mothers, children and the poor which have been in effect since the New Deal of the 1930s are abolished.

  20. The US is thought to be the developed world’s most successful economy in terms of employment at this time, with a rate of about 5 per cent (not counting the immense prison population, those who have stopped looking for work, and the estimated 40 million who work for less than a living wage). The disciplining of the American working class to fit the global system went through a lengthy period of life-reduction. By 1992, US wages for non-supervisory personnel had dropped 20 per cent over 20 years (Walter Russell Mead, Harper’s, September 1992, p. 41). Even a leader of the global system, subsequently US Secretary of Labor, Robert Reich, acknowledged that ‘the majority (four-fifths) of the population is losing out’ under the new order (Robert Reich, The Work of Nations, New York: Vintage Books, 1992, p. 282).

  21. In the ‘highly competitive’ commercial airlines business, for example, one firm, Boeing, owns two-thirds of the global market for commercial airplanes. The other one-third of the global market belongs to Airbus Industrie. Both firms are very heavily subsidized by US and European governments respectively (‘US, Europe Clash Over Trade Deal’, Guardian Weekly, July 27, 1997, p. 8).

  22. Tools for Peace, Toronto, June 27, 1994.

  23. These citations from the Trilateral Commission text are taken from Murray Dobbin, The Myth of the Good Corporate Citizen, Toronto: Stoddart, 1998, p. 162. See also Peter Steinfels, The Neo-conservatives, New York: Simon and Schuster, 1979.

  24. Michael Walker of the Fraser Institute as cited in ‘NAFTA: A New Economic Constitution’, Canadian Union of Public Employees, February 3, 1993.

  25. Smith writes: ‘But in civilized society … among the inferior ranks of people … the scantiness of subsistence can set limits to the further multiplication of the species; and it can do this in no other way than by destroying a great part of the children which their fruitful marriages produce’ (Adam Smith, ‘Wages of Labour’, Book I, Chapter VIII, Wealth of Nations, p. 84). Note that Smith anticipates Social Darwinism in his theory of human selection.

  26. Adam Smith, ‘Of the Expenses of the Sovereign or Commonwealth’, Book V, Chapter I, Wealth of Nations, p. 482.

  27. Cited by Maude Barlow and Bruce Campbell, Straight Through the Heart. Toronto: HarperCollins, 1995, 37. In the case of Canada, 97.5 per cent of all foreign investment in 1997 went for takeovers of domestic firms, a year in which ‘foreign investment’ was typically trumpeted as the highroad to domestic prosperity (cited by Mel Hurtig, ‘How Much of Canada Do We Want to Sell’, Globe and Mail, February 5, 1998, p. A23).

  28. Cited by Maud Barlow, Class Warfare, Toronto: Key Porter Books, 1994, p. 62.

  29. Cited by Geoffrey Hawthorne in ‘Capitalism Without Capital’, London Review of Books, 26 May, 1994, p. 12.

  30. Cited by Madelaine Drohon, ‘Perils of Privatization’, Report On Business Magazine, May 1996, p. 41.

  31. For a combined empirical and logical analysis of this global structure of media control and its operations of selection and exclusion as an overall system, see my ‘Understanding the System of Fallacy of the Mass Media’, Informal Logic, 10, No. 1 (1988), 133–50.