John West - Labour supporter and journalist

Currently living in Paris, I'm a Labour member, activist and freelance journalist. I'll be writing mostly about missed opportunities, as I see them, and the necessity to rebuild Labour as a cohesive movement. We mustn't lose sight of reality, but we should sometimes challenge it.

Tuesday, November 08, 2005

Some thoughts on the market

I'm having an online debate with some Labourites and wrote some stuff about markets and the orthodoxy of free markets themselves acting as a guarantor of freedom, which may be of interest (but, on the other hand, may not - hence this disclaimer...):

I think my biggest problem in the debate about markets is the "end of history" analysis. If there really is an argument that has been discredited by argument, evidence or history, it's the idea that there are any economic ideas that can be taken as ultimate totems of truth. After all, the absolute truth of monetarism as an anti-inflationary and healthy method of economic revival 20 years ago has been rejected heartily in favour of an orthodoxy of macro-economic fiscal tweaking as much more effective. That's why the higher tax/lower tax/flat-tax argument is the only one in town. But that won't always be the case.

The argument for free markets being a guarantor of freedom itself is, truthfully, meaningless. The far left demonises the market as a force of evil. The right as a force for good. The market, however, is merely a mechanism created by humanity. It can be benign, or not, as we decide - the market is not an anthropomorphic being "deciding" anything! I humbly point to the work of Cambridge economics professor Geoff Harcourt, or the new book by Mark Braund "The Possibility of Progress", both of whom rubbish the idea that by pointing out the limits of the market that they are in any way communistic, against freedom, or mad!

Equally, the unease felt in South American countries such as Venezuela and Brazil about the creation of an Americas-wide free trade area demonstrates that there is a debate to be had about the relative freedoms that are balanced in the creation of vibrant markets. This debate is not over. Any call to "face reality" or stick to "facts" is really a call to close down debate. Any alliance to the idea of the free market as a guarantor is ideological, and not based on reason. In truth, whilst we all acknowledge certain *truisms* (i.e. no return to command economics), there are no hard and fast economic truths, just various economic models.

In truth, I am quite a fan of Gordon Brown's tenure of No. 11 (give or take a PFI) and his growth economics, but even he recognises the limit of the market in achieving economic goals we hold onto dearly.

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