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The state in the free economy (Part Four): The purpose of the 'freedom' of the economy PDF Print E-mail
The Labour Movement-Economy

wtc_commonIt must reasonably be asked about this freedom:

(a) Is its aim the free movement of goods for the benefit of all, or chiefly the freedom of profiteering of traders? These are two entirely different things, although they may be coincidentally, but impermanently, concurrent in the second instance.

 

(b) What content, in the present instance, does the benefit have: economic, cultural, or other? And what are the goods which are being handled? 

(c) What impacts does the free movement of goods have on the planet?

These questions must without fail be answered by everyone if the situation and its causes are to be understood, because the results will be in accordance with the content of the benefit desired. Naturally, freedom of the economy is in no circumstances the freedom of which we have spoken earlier, since it is not a part of the systemic triptych Liberty / Equality / Fraternity which ensures the smooth working of individualism with its freedom and society with its obligations, and because all great ideas have ontological importance and we cannot employ them in a rough and ready way for such purposes. Nevertheless, imitations or sedimentations of great ideas in the field of action are compatible with evolution to the extent that they facilitate it, but not when they bring about involution or distortion.

Lest it be thought that concern with ideas means impractical and useless theories which have no connection with action - a view which is the constant sad refrain of any party - political or other public debates, which usually skirt round the substance - we will give here the view of the Nobel-prize-winning neo-liberal Hayek, to the effect that the battle of ideas was the key, and that probably a generation would be needed for this battle to be won, not only against Marxism, but against socialism, state planning, and Keynesian interventionism.[1] It is only that in this case ideas have not called forth displeasure, because they were not presented seriously as ideas, but literally as an advertisement for the freedom of man in an indefinite way, leaving everyone to fantasise about whatever he wished. We must understand at last that behind everything there is an idea, albeit an unconscious one. However, the correct interpretations of ideas cannot be presented as advertisement, nor do they, on their side, have the strength of the agents of power, or the human subconsciousness, which is easily manipulated, and so everyone has to make an effort to understand them, and, above all, to experience them. But in order to do this, the individual must feel together with freedom his responsibility towards society as a whole. The freedom which was promised was totally individualistic, and so, competitive, and not for all. Thatcher, as a champion of liberalism, said that there is no such thing as society, only individual![2] Extremes are always facile, and crafty in their workings. 

In the end, however, there is no freedom without responsibility. Of course, the wealthy are 'free' to do whatever they want. But this freedom is an illusion –it is essentially scope to do whatever they wish, which has no connection with freedom. But if, in presenting neo-liberalism, they used the right word, that is, to have 'scope' to do what we like, how many would willingly follow them? Would they have the same feelings of euphoria and emotion at the thought of freedom? Obviously, they would not have them, because people want to feel assured that someone is selfless. But the strange thing is that they live in a tragic state of division: though they are inspired by the ideal, in practice they are at the beck and call of travesties of it –which is why they literally wish to be led astray, so as not to have guilt feelings. This is why politicians and managers also so easily put forward ideals in words, in order to conceal the truth. For this reason he who wishes to deceive will use a great idea vaguely in order to excite emotion, but both he and the man in the street will attempt the opposite. Precisely the same happens in the relation between the two genders: they talk easily of love, but what they want is physical and psychological comfort and nothing further. But if they were to admit this, the relationship would lose its charm. 

An example of division is the United States with freedom without society, and the former USSR with society without freedom. And as David Harvey says: "The movements of the Left have not succeeded in recognising or dealing with, still less overcoming, the inherent tension between the quest for individual freedom and for social justice."[3] Also: " ... within the American Left it has proved, for some time now, exceptionally difficult to forge the collective discipline which is necessary for political action to achieve social justice without affecting the desire of the politically active for individual freedom and full recognition and expression of individual identities."[4]

As we realise, the world's problem is neither the Left nor the Right or 'ideologies', but the fact that for every individual ideas raise insuperable obstacles in their synthesis. This is due to their mistaken interpretation and the psychologically erroneous treatment of them. Equality is usually based on envy, freedom on arrogance, unity on baseless emotionalism and leanings towards self-centred security. These are the basic problems of man, on top of which the practical problems of the economy, civilisation, international relations, etc. have piled up.

However, we should accept that today there are many people who are interested in other people anywhere in the world, which is something that would have been unthinkable in the past –but they are not a strong enough minority.

1. Is, then, this freedom to the benefit of all, or only of a few?

The aim of a view is usually made apparent by its results, to the extent, of course, that we are aware of them, because for a length of time they could be unseen or deliberately concealed. For example, the insistent pursuit of the privatisation of everything - thus removing from the field of state welfare public goods such as health and water, in the knowledge that the private sector has only profit as its aim, without any obligation to supply goods or services free of charge - shows that their aim is not the free movement of goods for the benefit of all, but to achieve free economic development with the greatest possible profit 'for those who are able' to make it through the handling of goods. This is a logical conclusion, because as basic goods are economically inaccessible, they will not be bought by the poor, and so the free movement of goods will reinforce only the comfort of those who will have the economic capability of paying, and will impair culturally the life of the rest, since they will spend more income on basic goods, without there being anything left for their quality of life.

This, for example, may easily happen with the privatised water of poor countries, which the companies can sell it outside its country of origin, since certain other countries will have money - or more money - to pay for it. Or the same could happen with the products of the vast areas bought by wealthy individuals from the West - and from other countries - in South America and Africa, thus alienating the local people from their homeland and reducing them to slavery. Of course, as Plato maintained, at a time when it was already argued that the natural law dictates that might is right, that those laws are not just " which have not been introduced on the part of the whole of the state in the interests of the common good".[5]

This free movement will never be truly free to the benefit of all world-wide as long as there is an enormous difference in economic power between the different countries, or, at a national level, between the elite and the rest of the citizens. Quite simply, the law of the strong will have force, and for the strong everything will be open and accessible. But no idea is true if it does not apply to all, and so we should forget the idea of freedom, because it has been greatly abused. Plato was right when he said that "in that city where the law serves the rulers (is ruled) and not the ruled, it is totally invalid, and I can see that its ruin is not far off. But in whatever city the law is ruler of the rulers and the rulers servants of the law, I consider that there safety   is to be found, and all the goods are enjoyed ... "[6] Of course, today in the place of the city, we must look at the world as a whole.

This means that in the thinking of the prominent champions of this view, human dignity and humanitarianism, peace, and cultural development are not included – despite the proclamations of the United Nations, and their own.

Of course, we should note that there have also been liberals who held correct views on imperialism, peace, and other social problems. However, since ideas act systemically, interacting and complementing one another, and, moreover, on their appropriate level, if an idea which is distorted in terms of interpretation but definitive as to action creeps into them all, all the rest are subverted. And then some ideas were advanced at periods when the situation was simpler and to counter bad practices on the part of those who held official authority at that time, and their meaning had nothing to do with current practices. An example of this is John Stuart Mill, who upheld freedom, but for the benefit of all, and had no connection with the neo-liberals.

In the present case, that of the 2008 - 2010 economic situation, the excessive accumulation of wealth, which is an interpretative distortion of freedom, does not lead to real freedom, but to power for the few, and power is by definition contrary to all the other ideas, as it is also opposed to the much-vaunted competition, by reason of the oligopolies which are thus created. Adam Smith said that "Wealth, as Mr Hobbes says, is power".[7] As we have said before, this truth is, deliberately or involuntarily, passed over in silence in the various theories of the free economy. The fact that the state economy has also failed cannot serve as an excuse, but only as a challenge to us to discover the cause of this double failure. The systems in the end are no substitute for the anthropological factor.

2. Does the economy as it is have cultural values as its aim?

Profit is not a true cultural value – though it can, coincidentally, contribute to this end, mainly by breaking down frontiers of exclusivity and ignorance through the market. The intention of opening up of markets is not a breaking down of this kind, but it involuntarily brings it about as a necessary consequence of the inevitable flow of information on a world scale, since this flow is not fully controllable either in its nature or because of the existence of world competitors. That is, the economy has been a field both of fundamentalism, because of the possibility of power which it provides for the few and, at the same time, a field of enforced interdependence and mutual influence between different societies.

Economic benefits, naturally, cannot be destined only for the needs of survival (water, food, clothing), but also for education, the beauty of life, peace, evolution. These things do not fall within the category of the dispensable, but when they are distorted as objects of consumerism and accumulation, then they are non-cultural.

On the other hand, what exactly is the state as mediator of human desires and needs seeking after? Only the material prosperity of its citizens, because this is what they desire, or can it have, in reality and not only as policy statements, broader, for example, cultural and anthropological aims? In the event of its having those, is there a sufficient number of citizens to support them? And by the quality of being cultural we do not mean the forms of nationalism in a bad sense of every kind and mass egoisms, but the improvement of relations between all human beings and between people and the environment. In the event that a number of supporters does  exist, the state - regardless of its proclamations - will be in the hands of an elite, which could be either self-centred (a power elite), as most elites are, or, by way of contrast, could be, seldom, an elite of values, that is, better than the anthropological level of the many. This is a historical truth about the role of individuals in history, as, for instance, in the case of the positive role of Solon with his law on the seisachtheia ('shaking off of debts') in ancient Athens – though there is also, of course, the harmful role of other people.

As to the freedom of the economy, it must be stated that no true social value has as its aim the interests of the few, even when in practice it is concerned with a few. It may concern the right of an individual, such as, for example, during the administration of justice, but that reinforces the principle of justice, or of security, or some other principle which is to the benefit of society as a whole.      

In the issue, then, of the benefit which is gained from the free movement of goods a fundamental problem arises: the fact that the desire of the many may coincide with that of the few in the field of competitive desire, that is, that the many agree on profit as a life's motive, but protest when they are swept away by the current of unfavourable events, as, for example, in Greece, where many people played the stock exchange, without any concern for the origin of the money, the effects of their profiteering, or the moral value or degradation of their acts, and afterwards complained about their losses, though they knew that not everyone can win (but hoped that they would be the exception), and also that where desire rules, there is no transparency. This is, naturally, the unadorned reality of life in society. However, this reality is schizoid, because man stands torn between his desire and its probable results, which he cannot control.

We come, therefore, to the sad conclusion that people's disagreements do not, in the end, lie in the substantive directions of the consciousness, but in the results that follow, which they would have very much liked to evade, as they are indifferent to everybody else. Of course, there are exceptions provided by the thoughtful.

This split, on the one hand, initially makes things easier for organised power in pursuing its aims, but, on the other hand, in the end turns against it. In reality, it is a question of a simple competition of strength. But it brings out the part played by peoples in the power game. And the issue of responsibility is one of many factors, since, on the one hand, conscious awareness has to be taken into account, together with the manner in which strength is abused (in the case of the agents of power), and, on the other, wilful blindness and inertia (in the case of the masses), as the fact that there are large numbers of human beings is not a field where responsibility should be lost, but is, on the contrary, a field for the manifestation of a responsible collective subjectivity which has no connection with any organisation.

Profiteering does not lie, of course, in any commercial receipts, but in that which is not compatible either with the value of the product or the service, or with social values and the functioning of society, such as, for example, 'playing' the stock exchange not for the value of a share itself as an investment, but with the sole aim of profit merely through trading it. Even worse profiteering is that which because of the number of the players can affect the prices of basic goods, such as foodstuffs, energy, etc., to the detriment of whole populations.

At this point we consider it necessary to make a distinction between interests and a right, since the majority of states put forward their interests as a justification for their actions or the actions of their elites – and nobody seems to be excepted. This complicates the situation much more, because any irrationality or greed or pursuit of strength can be interpreted as interests, whereas a right is limited by law and is recognised to everyone; in the last analysis, whatever is required for the right development of man should be seen as a right, and so have applicability to the whole. Countries talk about interests, not only because the corresponding rights have not been adequately defined by international law, but also because in the international community there is nothing corresponding to the social fabric of each society to restrict and define the content of rights.

Indeed, they speak of state or national interests with that kind of conviction which is appropriate only to protected rights.

Thus we end up with the exercise of state power not in a limited territorial region (which is considered a powerful constituent of the state) because this may act upon the whole of the planet or on a part of it, as did colonisation, with examples which are both contemporary and from the past. Of course, this can be done only by the stronger states, but potentially all states express the same thing at a lesser level of power, or as potential regional powers, or even in relation to certain of their neighbours. Here, naturally, states may identify with the elites or with the peoples.

This is nothing new, but today's world has the scope of thinking more than the old world did about these questions.

All these are problems arise from the relation of man with ideas and concepts. As long as man believes that he is the creator of ideas as objects alienated from himself and does whatever he likes with them, he will attempt to go against them or to overthrow them as he thinks fit - as an individual or collectively. In reality, this kind of supposed 'creation' is a splitting of the consciousness: that is, when a person is in difficulties, he recognises his own inner affinity with an idea as a property of the whole which he also shares, but as soon as he is no longer in need, desire moves into the driving-seat. This is, albeit unconsciously, a Nietzschean view of life, in which you act against others because, quite simply, you are able to do so, and because you are able, perhaps you also think it moral.

3. Two of the manifesto items of the free economy are the free movement of goods, and the free movements of capital

(a) The free movement of goods is not defined in relation to its content and its impacts on environmental conditions. Therefore, answers have to be given on two things: first, the nature of the goods which circulate, and, second, what impact this has on the environment.

'Globalisation' has nurtured chiefly strong economic players (at various levels of strength), which has brought about an excessive control of the market by private individuals, which is, however, non-apparent because it is not official. And control as arbitrariness does not cease to be control wherever it is coming from – whether from the state or from the individual.

On the other hand, we must also regard as globalisation colonialism, which was hard to bear for the oppressed indigenous peoples, but was the only way in which the nations could break down the borders of their isolation. The strange thing is that power itself seeks after independence, but is possessed by an absolute dependence on the environment, since it wants to have power over it.

The colonists, of course, plundered the wealth of the colonies, exhausting the biodiversity. This was continued intensively by the industrialisation of farming and stock-breeding, which permitted the creation of large-size units of production, that is, a number of animals which ruined the plant variety, and large single-crop areas which ended up in the setting aside of many varieties. In addition, the seed trade was operated with small numbers of varieties, but farmers preferred to buy these seeds, rather than take care to keep their own local seeds. Science also intervened in the creation of more resilient varieties, and later of genetically mutated seeds, resulting in an increased loss of biodiversity. Consumerism has also gradually drained off the wealth of the earth. If we add to this the fearsome increase in the earth's population, we have as a result the  strengthening by geometrical progression of all the negative factors, the final consequence being climate change and environmental impairment both because of the climate and because of pollution and the exhaustion of the mineral, animal, and plant wealth.

In this grim picture, today's 'globalisation' has to offer excessive material development, which entails further exhaustion of the already exhausted natural resources, movement of goods from and to every part of the earth, which impairs the environment to a vast extent because of the environmental footprint of the carriers and the cost, because of the tremendous increase in transport. It also boosts consumerism through advertising and the fostering of imaginary needs which cause a worsening of the above situation.

All these problems do not mean that agricultural communities should remain closed and isolated. Isolationism of this kind does not promote cultural development, as all development results from relationships. But openness of societies and trade should not be possessed by this ruthless profiteering and consumerism, because these are factors for the disruption and destruction both of society and of nature. Nature does not tolerate violence and excess; it tolerates only mildness, allowing renewal, whereas constant competition destroys society and nature.

Consequently, this free movement of goods has been supported, superficially, on the basic truth of freedom, but lurking behind the proclamations was a greed which has ground down the world with its excesses. Now let us see what will happen with the numerous economically emergent societies of the East, which the West has adequately equipped with its own senseless models of development for them to follow.

The great numbers of goods which are available in the West do not now add anything to the quality of life, but only to the mania for consumerism.

Furthermore, all these products are advertised in a way which does away with the freedom of people who are bombarded daily with so many messages that no one can seriously maintain that freedom is not being adversely affected. Advertising is, moreover, a kind of propaganda or proselytisation, only it concerns commerce rather than politics or religion. And if we take into account the fact that companies - the big ones, at least - engage specialists for advertising, so that it can penetrate the consciousness more effectively, we can understand this very grave problem of manipulation. Moreover, advertising also is a charge on the cost of the product, at the expense of the consumer.

All this advertising and cultivation of models has as its aim to create new needs/desires, and therefore, to overthrow the normal correlation of supply and demand. In reality, all the difficulties of the Western world are due to the disharmony between these two factors, which is itself due to the excessive accumulation of capital which has as its purpose incessant investments and the sale of products and services, and so over-development of supply.

(b) The free movement of capital is another point which requires clarification, because the movement of capital in order to avoid the payment of taxes to the country or of other obligations, or the constant threat that those involved will leave this country if they do not receive the treatment they desire can lead to the strangulation of the whole of the country and its people. But what sort of freedom is this which can in a carefree way use or destroy the lives of millions of people?

The powerful countries advance against the weak, such as Greece, the argument that they are not competitive and that they should become so. How exactly? What large country would allow a smaller one which it uses as a market for its exports to become self-sufficient and perhaps in competition with it, since this would reduce its own wealth? In the nineteenth century, Mehmet Ali attempted to industrialise Egypt, and the country was attacked by the Great Powers of the day, in order to head off his efforts. Over and beyond those tragic inadequacies of Greece for which it is itself responsible, Europe should face up with honesty to what it promises, otherwise it will be faced with chaos.

Given that neither the state with its twisted anthropological basis, nor greedy private enterprise has proved capable of solving society's problems, the issue should be examined in a long-term and quality perspective.

We believe that what is needed is a more bona fide and comprehensive study of all these aspects of the matter, so that a correct and beneficial amalgam of principles, needs, and humanitarianism is achieved. Protectionism and alleged freedom are both mistaken options, because they do not improve the relations between human beings and peoples, and can be equally competitive. If these conditions are not fulfilled, then we may have retrogressions to earlier practices or lawlessness of every kind – this is certain, because things cannot stand still.   

The role of the banks, at national and international level, with the confidentiality of deposits, is a fundamental factor favouring fraud and unreasonable enrichment at the expense of the many and secrecy as to the origin of capital.

A second factor is lack of transparency over the action of capital, which ascribes freedom to it, but takes it away from the world's peoples, who, on the one hand, pay for the companies' losses, and, on the other, suffer the damage caused by the banks' behaviour.

When we say lack of transparency, we mean, apart from confidentiality, the fact that it is not known who the persons are beyond the horizon of the companies (a very serious matter for the identification of the natural persons involved), and who are likely to be the same in many companies - perhaps companies which appear as morally opposed to one another - just as the legality of their operations and products is not transparent and controlled. – unless freedom is to be understood as illegality.

A serious example is provided by the major American banks with their profiteering products, which in order to create these, employ quantity analysts[8] and other scientists in order to produce complex transactions and trading with a depth of leverage whose consequences they do not know.

In the end, these banks reached the point of bankruptcy, but it is not known what dividends their shareholders received or whether they should have received them, given their true economic position, etc. Only the bonuses which concern the executives have been discussed. How much, for example, did the shareholders contribute to the rescue packages with the wealth which was gained from the profits of the preceding period? Is there no civil compensation due - if not criminal liability?

And then, certain legal facilitations given to the economy which reinforce arbitrariness and unaccountability at the expense of society as a whole should be investigated to discover to what extent these are in accordance with the principles of freedom and equality which apply to all and are safeguarded by the constitution. But if in some country improper facilities are established by the constitution, then we should mobilise legal mechanisms – which exist in theory, but are not implemented. Supra-constitutional principles or natural law can be mobilised in such a case. Let us not forget that the trial of the Nazis at Nuremberg was held neither by virtue of the German constitution, nor by virtue of established international rules of law. It was held by the moral invoking of principles. We are not saying that principles should be 'invented', but that those which already exist, and which we ignore through wilful blindness, should be activated.

The economy is the field revealing the reality of human relations. However, the problem is that it does not concern itself with the basic principles of life on the planet or human life with which it must be harmonised, but it skirts round them and replies with peculiars of the field which has already been created for the operation of money and of other factors. Thus the specialists refuse to give an answer as to why this operation, and not another, different one, should exist. They cut the operation of the economy off from society and values.

The economy is clearly governed by psychological factors, not only those of the masses who are impelled by the various, often senseless, models, but also those of the people in power, who may think that indifference and lack of sensitivity takes them, like Nietzsche's group of 'leaders' outside the field of the psychological process and outside the world of common mortals. But it is not only emotion that is psychological, but also indifference as 'divinisation' (‘theosis’) through power, which conceals a fear of otherness and the Whole.


[1]  David Harvey, Νεοφιλελευθερισμός [Neo-liberalism], publ. Kastaniotis, p. 48.

[2]  Op. cit., p. 49.

[3]  Op. cit., p. 72 [translation from the Greek edition].

[4]  Op. cit., p. 71 [translation from the Greek edition].

[5]  Plato, Laws, Book IV, ed. Georgiadis, p. 145.

[6]  Plato, Laws, Book IV, ed. Georgiadis, p. 147.

[7]  Adam Smith, Έρευνα για τη φύση και τις αιτίες του πλούτου των εθνών [An enquiry into the nature and causes of the wealth of nations], p. 60, publ. TO VIMA.

 

You may also read:
THE STATE IN THE FREE ECONOMY (Part One): A STATE FOR ALL OR A STATE FOR A FEW?
THE STATE IN THE FREE ECONOMY (Part Two): A STATE FOR A FEW OR A STATE FOR ALL?
THE STATE IN THE FREE ECONOMY (Part Three): THE ECONOMY AS A FIELD OF POWER AND AUTHORITY

Ioanna Moutsopoulou, Lawyer
Member of the Secretariat of Solon NGO
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