Thursday, January 23, 2014

Free Market Mythology | How Libertarian Ideology Undermines Democracy Part I: Toward a Reconstruction of Discourse and Democracy


The United States, as the apex of Enlightenment political theory, was founded on two competing principles: democracy and the free market. In contemporary times the two are almost indistinguishable but in reality they are in direct conflict. The free market is understood as a natural mechanism completely disconnected from political institutions and democracy is solely a political institution. 

Craig Gilson is a good friend of the WUW? crew and provides some of the best material to refute.

The purest of Libertarians (anarchists, although not the only strand of libertarianism tend to be the most vocal) view the state and the market as dichotomous institutions and they contend that you can only have one or the other - true freedom can only exist within a market society - free of all political intervention. This strain of political and economic thought is problematic because Democracy, a form of government constituted by the nation-state system and purely a political institution, is that form of government in which the people legitimize the government through informed consent and equally participate in the acts of ruling an being ruled. To simplify, for the sake of being clear, democracy cannot exist outside the state.

Note: In the same way, market economies also came into existence with the alongside the nation-state and have always been embedded in the state. we will discuss this further in part 2 of this article.



Before we go any further let me qualify something. It is true that the state has the ability to suppress the right of its citizens and does so on various occasions and in various ways. However, the state is also the only institution with the legal capacity to protect the rights of individuals from other individuals, from the state, and from foreign competitors. In contrast, the market has neither the power to grant rights nor the power to protect rights. Further, the market provides no mechanism for individuals to participate in the decisions that effect their lives. 

I am not arguing that markets have no role in the structure of society. I am arguing that markets do not have the only role in society - markets are one of many means to achieve the ends of a more democratic society but not the end to be achieved by a free society. We have to first understand how, in reality, the state and the economy interact and then we can debate how to best ensure that democracy operates in a way to provide citizens a greater degree of participation in the act of ruling and being ruled.

In order to move past the “state/ market” dichotomy, we first need to explore the consequences of markets without governance. Second, we must establish a historical and rhetorical understanding of what we mean when we talk about the state, the market, democracy, and citizenship – not in the form of internet memes and empty slogans such as freedom, tyranny, liberty, and communism. Rather, we must establish a historical understanding of these concepts as they developed at in the 17th and 18th centuries and how they have transformed in our current era. Divorced from the furious and simplified libertarian rhetoric, we can approach these words soberly and productively. Last, putting aside the empty, ahistorical, and simplistic political language, we must open ourselves to the discursive possibilities of solving national and global democratic deficiencies.

The goal (following Margaret Somers 2008) is to find the best balance between civil, political, and market institutions to ensure an optimal level of democracy. 

I am not arguing the possibility of constructing an utopian democracy is, rather I am proposing a more balance approach towards the market/state dichotomy in which stronger democracies provide conditions in which:

  1. More citizens are more free to participate in the political decisions of their government
  2. More equality of voice is established to ensure fair participation for all citizens
  3. More rights are protected and enhanced against powerful economic actors as well as powerful political actors (this can be read as the "state" as well as the "99 percent")
  4. Economic production operates efficiently while also minimizing inequality and enhancing the life of all citizens and the political body as a whole
  5. Global economic structures are more balanced and promote national sovereignty, economic equality, and the institutionalization of human rights.


My argument is that democracy is ultimately a discursive institution. Born from a history of arguments (philosophers, politicians, private citizens, etc publicly debating the best way to organize free and equal people to maximize freedom and minimize domination) democracy is inherently a rhetorical and social construction. 

Our contemporary democratic deficiencies stem from the absence of critical and realistic debate about what is the best way to live together and the lack of opportunity for citizens to construct their democratic institutions. This lack of debate leaves a void in which a minority of the most powerful economic and political actors, employing free market rhetoric to impose legitimacy, are given sovereignty over states themselves as well as a majority of citizens in individual nation-states and global citizens. 

When the few are free to make decisions for the many, the freedom of democratic citizenship is reduced to the freedom to consume and the sovereignty of the nation-state to grant and protect rights is reduced to the sovereignty of the powerful to dictate and define the rights of the state and the state’s citizens. 

Instead of organizing a democratic society that maximizes freedom and minimizes domination, we now have a market society that minimizes freedom and maximizes domination. Therefore, we must redefine our words, balance civil, political, and market institutions, and open ourselves the full spectrum of discursive possibilities to create democratic structures that maximize freedom and minimize domination.


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