There is a too often unchallenged assumption that seems to exist—especially among business minded people—such as that markets are the preferred mechanism for everything. Clearly, markets are not everywhere applicable, especially were equal opportunity is the intent.
Why don’t most professional sport leagues use the market mechanism when drafting players? The NFL, for example, gives the losers first pick in the draft each year. Why? Simply, the league would be absent of widespread rivalry and become boring. Why? Because there is an auto-correlative nature to competition and markets—that is winners are more likely to be winners. As a result opportunity would be limited for all but those at the top. The business of the NFL would self-destruct if the selection of talent followed an unfettered market-driven process—if those with the most got the most. The viability of the (entire) league is enhanced when opportunity is afforded to the ‘have-nots’ by overcoming the auto-correlative nature of competitive markets.
Knocking Off Opportunity
Why is opportunity important for a society? The simplest and most direct reason is that bettering one’s life is greatly dependent upon opportunity—no opportunity means slim-to-no chance. Of course competence, talent and effort play a role, but these absent of opportunity will not likely produce fruit.
In theory, American society is based upon the principles of democracy where the ultimate aim is to optimally allow each individual the right to life, liberty and the pursuit of happiness. In this context, liberty would afford one the freedom to improve his/her condition. While this does not mean that everyone should have equal outcomes, it does mean that everyone should have equal access, equal opportunity.
Accompanying the widening household income gap is a general state of affairs that can be characterized as: economic instability, unemployment, impoverishment, homelessness, environmental degradation and educational decline. Richard Wilkinson and Kate Pickett reveal in their book The Spirit Level that unequal societies present more homicide, more obesity, more mental illness, more people incarcerated, poorer general health in society and a lower life expectancy. Clearly, with the United States being the second most unequal society, in these findings there’s no happiness for most within American society! It seems in regards to many of these, either opportunity is not taken, and thus wasted, or the access to opportunity is limited.
Ideologically, America is a society of the people, for the people and by the people—yes a democracy. At minimum this should afford individual citizens equal say and yes equal opportunity—if it is the land of opportunity. However, in practice it appears to be a government: of those with access, for those with access and by those with access. Why is it that access and thus opportunity, is disproportionately afforded to those bearing gifts—to the tune of $9.6 billion/year? What is the cause of this incongruity between theory and practice?
Here a Market, There a Market, Everywhere a Market
Has a belief in the omnipotent power of markets caused us to structure everything as such, where payment of money brings satisfaction of need? Have those in authority—commonly referred to as the leadership—shunned (their) responsibility to ensure that individual citizens have equal opportunity? Have they turned to the invisible hands of the market as a replacement for responsible action? If those advancing the market as a solution to our ills are successful, then there will be no one held responsible. It will all be a puppet play with those pulling the strings securely hidden behind the market mirage that we the people, through our cooperation, help sustain.
The difficulty we have with government is not that government is too big or that it is turning everything into public property (i.e. socialism) or that it is taking over everything (i.e. fascism), it is that it is dishonest and corrupt! As noted by Eugene Fama , a pro-market economist (University of Chicago), “regulators get captured by the people they are supposed to be regulating; this is ‘not unusual, it happens all the time’.” The real issue is not so much big versus small government it is good versus bad government.
Capitalistic democracy is in effect plutocracy—a government of, for and by the (very) wealthy. It is a market-driven government where winners get to choose. Yet markets have no place in societal affairs! This type of government is a self-serving government; one that avoids transparency, public disclosure and that serves only those with access—those who bear gifts—while mollifying the rest.
A self-serving, corrupt and non-transparent (i.e. secretive) money-for-favors-driven government, no matter the size, is a threat to the viability of a democratic society, as well as its economic system. Thomas Jefferson wrote to John Taylor in 1816, “I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
Markets can be very effective, but they are not everywhere applicable. In other words, could it be that capitalistic principles have infiltrated and compromised the very practice of democracy?