Economic System

Soon it is time to look at my footage; there’s no reason why the timelapse film won’t have worked – I did lots of test footage – but inevitably I feel quite anxious about what it will look like. There’s no time to reshoot if it hasn’t worked… The mushrooms have been beautiful and have spread spores further than ever before, giving some beautiful tidemarks.

And I’ve been ploughing through Capitalism and Freedom…so much of it reduces down to price and profit: monopolies are bad because they mean prices are higher for consumers (and for no other reason), the only possible social responsibility of corporations is “to make as much money for their stockholders as possible.” Maximisation of money is the prime good, within “the rules of the game”; which should be set up so that “an individual pursuing his own interest is, to quote Adam Smith again, “led by an invisible hand to promote an end which was no part of his intention.”” So, as long as we don’t actively harm other people (and he is pretty casual about the possibility of indirect impacts), and act always to maximise our income, everything will be just fine. He ignores the evidence of how people actually act – for example, in accumulating wealth and resources (see this NASA study for how the interplay of inequality and resource over-exploitation plays out) and has a very sunny view of the consequences of profit-seeking (no worries at all about pollution, poor working conditions, the influence of corruption on civic society, although he does caution against the rise of a corporate state.)

I’m making a timelapse film of the detoxification by oyster mushrooms of Milton Friedman’s book Capitalism and Freedom. The mycelium is well established on the book and I shocked it on Wednesday 16th April – this is where you expose the mycelium to cold and light. I estimate that the process from now, through to mushrooms, and then the mushrooms giving off spores and drying out, will take about 40 days. So I have set myself the task of reading the book over the same time, five pages at a time. It makes for interesting reading, and I am surprised and slightly disturbed to find some common ground. Maybe I will be a convert by the end…

There are three prefaces – one written at the time of original publication, in 1962, when the climate was still dominated by Keynesian thinking and generally hostile to the ideas in the book; one in 1982, after the election of Thatcher and Reagan; and one from 2002, after the neoliberal trinity – deregulation,  privatisation and weakening the power of trade unions – had become the new orthodoxy. He puts this shift down to the failure of Keynesian policies,§ such as support for welfare, and the collapse of the Soviet Bloc.

Friedman states, in his 2002 preface, that “increases in economic freedom have gone hand in hand with increases in political freedom and have led to increased prosperity; competitive capitalism and freedom have been inseparable.” A partial view, and a limited idea of freedom, when set against the ‘race to the bottom” that has taken place regarding working conditions in developing countries, but nevertheless this is the key promise of neoliberalism: “it will make people freer and more prosperous.”

What is interesting, in his Introduction, is to consider how much there is to agree with. Taking issue with Kennedy’s famous “Ask not what your country can do for you – ask what you can do for your country,” Friedman says “To the free man, the country is the collection of individuals who compose it, not something over and above them.” As a refutation of blind patriotism, this makes sense; as a Thatcherite justification along the lines of “There is no such thing as society. There are individual men and women, and there are families”, it is more problematic. Much of what he says about freedom – and bear in mind he was writing only a decade or so after the end of the Second World War marked the defeat of one totalitarian state and the victory of another – is attractive, although he fails to define freedom itself. It’s an idea that seems self-evidently good, like motherhood and apple pie, but does he mean the freedom for any individual to do what s/he wants, or the freedom to act as long as no one else is harmed, or the freedom to make as much money as you can regardless of the consequences, or mental freedom…?

He refers to the concentration of power as being the great threat to freedom. Yup, can’t argue with you there Milton. To benefit from having a government while avoiding the threat to freedom, he says that the scope of government must be limited and power must be dispersed. It’s interesting to consider how this compares to anarchist thought – the basic principles are similar, although within anarchism you would not have a government (although you might have an administration).

Friedman states that the major function of government mus be to “protect our freedom both from the enemies outside our gates and from our fellow-citizens; to preserve law and order, to enforce private contracts, to foster competitive markets.” In other words, in large part to make things safe for business to be transacted. He concede that government can also be used to “accomplish jointly what we would find it more difficult or expensive to accomplish severally,” but requires there to be a clear and large balance of advantages before government is used in this way. He goes on to say that government stifles innovation; that the great cultural advances have not come via government action, and that government replaces progress with stagnation and mediocrity. But the main emphasis of the book is the role of competitive capitalism – “the organisation of the bulk of economic activity through private enterprise operating in a free market – as a system of economic freedom and a necessary condition for political freedom”, and I suspect this is where I will find the most to take issue with.